Ann: Capital Call Notice under agreement with LDA Capital, page-65

Great find. Anyone who thinks tapping a loan shark like LDA for funding is good news, will be sorely disappointed. One only needs to look at HIO to see the same pattern - initial exuberance over the deal (including a retail-driven share price spike - what a gift for LDA to sell into), followed by dismay when holders worked out what the financing actually entails; LDA aren’t long holders, they’re just there to quickly flip shares at a profit. This was especially apparent with HIO because for some reason they elected to provide weekly Top 20 updates so you could see in real-time how quickly LDA sold down their discounted shares, despite all the usual assurances from retail that “these guys see the potential here” etc.

There is a good reason many refer to it as ‘death spiral financing’. As the article references, the company needs to reach escape velocity and the only way this will come is via very high growth in customer receipts.

The most interesting part is whether the $2.5M in receivables appears in this quarter. If it doesn’t, by my numbers they will have to re-state their 2022 revenues downwards (more here: https://hotcopper.com.au/posts/64843890/single). Like @Stickshift and others I do wonder if the fact they’re calling the capital so early in the year suggests another high cash burn / low receipts quarter. Incredible that this is still apparently worth $1.17B?