I think we are oversimplifying the issue. Has anyone spoken to the company lately?
The reason why the company raised the capital in the way it did is because it has a chronic shortage of funds. If we use the historical rate of outgoings this year we are on track to burn through $7Million, come July 2011. The question is, if we only have 1.8Mill at 2010 CY-end, where is the money going to come from? You cant get a retail capital raising done in a month, especially for such a small amount - the cost of raising that amount wouldnt add up (the monetary cost but also the time).
Money had to be raised quickely, it was as simple as that. It was also an opportunity to source or diversify the register. The more big business get interested in the company the better for all, especially if they are international organisations. The unfortunate side-effect is that retail shareholders are diluted, but as I said there was no alternative. You can see that the company is already thinking about how it can secure funding going forward, by appointing a banker to the board. With a company such as LCT you should actually expect diltion and further capital raisings. The company's technology is, in biotech terms, in its infancy. There is a long, long time left to get the treatment to market. I can tell you now, that LCT will have to raise tens of millions to get the treatment to market. The alternative is to partner and free-carry on development costs, manufacturing, distribution, marketing. This is how it works.
LCT Price at posting:
10.5¢ Sentiment: Buy Disclosure: Not Held
