How's the Capital Raise Going to Work?, page-7

First 7 Last

Share
Profile

Follow
DrillDown2014

256 Posts.

62

15/03/23

13:34

Post #: 66778210
Share

Originally posted by fourdollars: ↑

CHM is burning around $5m per quarter. Even with the recent R&D tax rebate, it has less than 2 quarters of funding remaining.

The L1 facility requires that CHM issues shares at a discount to the VWAP of 5 of the previous 30 trading days (selected by L1), so whatever the exact price, its looking like it will be under 7cps.

Current shares on issue: 437m

Raising $30m at 7cps = 429m shares. Plus L1 were already issued 5m shares back in June last year when the funding arrangement was announced. This would leave L1 with approx 50% of the company. I don't think any shareholder can take such a large position without the approval of other shareholders, so not sure how this can work?

The L1 funding agreement announcement did note: "Equity placement facility of up to a total of A$30 million over 24 months with L1 Capital ..... by way of separate placements (the size of whichare subject to certain limits)"

Maybe this is what the clause alludes to - ie there are certain limits to the number of shares that can be issued.

But even if this was capped to under 20% of the company, over 100m shares would still be issued to L1. This would only raise $7m, and not even cover a further 2 quarters of cashburn at CHM. Also, there is the possibility that L1 won't feel comfortable owing such a large percentage of CHM, leading to SP pressure as it reduces its position.

So does Hopper pursue the usual Bell Potter / sophisticated biotech investor route, where he issues discounted shares to nameless entities along with millions of free options? Its been his modus operandi at Imugene, but the last two capital raises there are so far under water it might not be an easy sell here. Might require issuing shares at a massive discount (sub 4c?), and possibly also result is a significant share overhang that puts further downward pressure on the SP.

Hard to see how CHM can be funded for much longer without a huge dilution ....

Expand

regarding the limits of the shares that can be issues refer to initial announcement

I thought the below was interesting at the time of the announcement - not sure how relevant it is but maybe Hopper can convince L1 to pay 95% CHM's minimum acceptable price - this could have been agreed at $0.10 same as initial investment - potentially a floor but would have been included in teh initial if such an agreement was in place

CHM Price at posting: 6.4¢ Sentiment: Buy Disclosure: Held
5 Upvote

1 Great analysis

Reply

Top Stories

ALK

Alkane Resources hit 57.2Kozpa gold production through FY24 – and eyeing 70Ktpa in FY26

LAT

Latitude 66 Shares Surge 8900% on Promising Exploration Update

LLC

ACCC raises competition concerns about acquisition of Lendlease projects

AS2

Askari sets exploration target of up to 323K ounces Au at Burracoppin

XRG

XReality Group wins $800K contract from Aus Government for military and police VR training tech

There are more pages in this discussion • 132 more messages in this thread...

First 7 Last

Add CHM (ASX) to my watchlist

(20min delay)
Last 1.9¢		Change 0.001(5.56%)		Mkt cap ! $16.64M

Open	High	Low	Value	Volume
1.9¢	1.9¢	1.8¢	$13.35K	705.9K

Buyers (Bids)

No.	Vol.	Price($)
1	32333	1.9¢

Sellers (Offers)

Price($)	Vol.	No.
2.0¢	1481067	6

View Market Depth

No.	Vol.	Price($)
1	32333	0.019
10	1319823	0.018
10	1263647	0.017
14	3263229	0.016
6	850232	0.015

Price($)	Vol.	No.
0.020	1481067	6
0.021	655110	4
0.022	1115555	4
0.023	155000	2
0.024	278304	2

Last trade - 13.41pm 04/07/2024 (20 minute delay)

CHM (ASX) Chart

How's the Capital Raise Going to Work?, page-7

Alkane Resources hit 57.2Kozpa gold production through FY24 – and eyeing 70Ktpa in FY26

Latitude 66 Shares Surge 8900% on Promising Exploration Update

ACCC raises competition concerns about acquisition of Lendlease projects

Askari sets exploration target of up to 323K ounces Au at Burracoppin

XReality Group wins $800K contract from Aus Government for military and police VR training tech

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

How's the Capital Raise Going to Work?, page-7

Top Stories

Alkane Resources hit 57.2Kozpa gold production through FY24 – and eyeing 70Ktpa in FY26

Latitude 66 Shares Surge 8900% on Promising Exploration Update

ACCC raises competition concerns about acquisition of Lendlease projects

Askari sets exploration target of up to 323K ounces Au at Burracoppin

XReality Group wins $800K contract from Aus Government for military and police VR training tech

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News