Ann: Non-Renounceable Rights Issue Offer Update, page-2

This is an interesting announcement, and we will know how successful this "Rights Issue" has been today. It is also typical of company announcements that are ambiguous (being open to interpretation or not clear) in its content.


Referencing the ASX listing rules mentioned, being Chapter 2 of the listing rules, it is in my opinion that the Rights Issue hasn't been overly successful after analysing the relevant sections. Honestly, how easy would it have been for the company to actually indicate what specific section they had failed to meet. Example, the company has not satisfied quotation conditions Chapter 2, 2.5 condition 5. Which IMO, 2.5, condition 6 - the securities are in a class of equity securities, or other securities with rights of conversion to equity, that are not already quoted, there must be at least 100,000 securities and 50 holders with a marketable parcel. If this is what they have not been able to meet, then the Rights Issue has not been successful and is now reliant on having the "shortfall shares" placed before the "attached options" can be quoted on the ASX? Or is this only related to the tranche 1 placement shares and attaching options? and these can't be listed until tranche 2 and the right issue including shortfall shares and options has been completed?

Some conflicting items in the prospectus (3.7):
The company stated that the based on public information as at the date of this prospectus, the persons who (together with their associates) have a relevant interest of 5% or more of the company's securities are set out as:

(1) Jetosea - 56,485,144 = 13.03%, whereas the last (and only) announcement was on the 12th Dec 2019, "Becoming a Substantial Holders Notice" indicating Jetosea - 30,817,199 = 8.8%, there has been no change in substantial holding notices to indicate the change from that announcement to what is in the prospectus.

(2) Ms Chunyan - 23,500,000 = 5.42%, no released announcement of "Becoming a Substantial Holder notice"

(3) Earnest Kohler - 20,114,118 = 4.64%, whereas the last (and only) announcement was on the 25th Feb 2020, "Becoming a Substantial Holder Notice) indicated Kohler - 20,614,118 = 5.94%, there has been no "Ceasing to be a Substantial Holder noticed" released.

Maybe in the company's minds this is public information, but until they make announcements it isn't public!


Xcel capital will do alright out the placement and rights issue, even more so if there is shortfall shares.
From the prospectus:
(page 4) Capital Raising fee 6% of the value of shortfall shares placed = TBA
(page 7) - 1.1.1a 30,000,000 (Advisor Options) as part consideration for services provided to the company in connection with the placement
Company announced a placement to raise $1,600,000.00 to sophisticated and professional investors.
(page 20) - 3: a fee of 6% of funds raised in the placement = $96,000.00 plus a success fee of $65,000.00

Equates to $161,000.00 (plus any monies for placing any shortfall shares) and 30,000,000 options
Not a bad pay day if you can get it.

cheers