70% increase ownership in IM3NY.pros vs cons, page-62

Hindsight is a wonderful thing and I thought this hindsight view of the past 6 months or so may be worth posting.

It seems clear to me (following these recent capital raises - the $10m this week and the disastrous $25m one in March = $35m in total), that what we have seen is MNS backfilling their capital position for the non-exercise of the 78m x $0.50 options before expiry in May 2023. I am sure that they believed the AAM Tesla announcement would have driven the share price over $0.50 to see those options exercised, and probably had that $34.5m of options sourced capital penciled into their cashflow by May. It did not happen and, with iM3NY starved of any cashflow, so the need to raise capital became imperative.

What they did not count on (and this goes to the heart of the matter, in my view, with the level of risk awareness / discussion in MNS at Board and Management) were a series of concurrent events:

1. The failure of not getting battery certification the first time around. It seems clear in hindsight that a failure in the testing processes was not contemplated, a plan B not in place, nor the cashflow, retesting and time implications of an initial failure really seriously considered.

2. They were not wise to the fact that one (or more) of their larger shareholders would use the Tesla AAM announcement as their opportunity to hop off the MNS bus (likely due to concerns about management capability because of what they had seen in my point (1) above). This selling pressure on the day of the announcement and the following days quickly sucked all the oxygen out of the announcement and flipped the market sentiment from an initial positive to a negative.

3. The declining share price then started to feed on itself as the question of funding really came into sharp focus. The AAM announcement highlighted the absolute need for near term funding to meet the Tesla timeframes, but the declining share price + failure of battery testing had closed off near term funding options in the eyes of many investors. Suddenly the large US Government + equity partner funding for iM3NY was unlikely until they succeeded with battery testing and sales (in other words, could show that Im3NY was a real & functioning battery plant). Plus a declining share price closed off a quick $34.5m coming in from exercise of options and generally things became much more difficult for MNS.

4. Then the continued and very lengthy delays in gaining the battery testing certification just sapped any remaining confidence in the stock, such that when battery certification did come, it was swamped by concerns on capacity of management to execute. A true crisis of confidence.

I can only see this turning around with a couple of concrete funding related announcements in the near term that starts to rebuild confidence in management's ability to execute on its projects. In no particular order:

- Actual (sizeable) sales from iM3NY are commenced.
- A term sheet is signed with a credible counterparty / counterparties for equity funding iM3NY to 5GWh and beyond at a reasonable pre-money enterprise valuation.
- New offtakes for iM3NY from credible (most likely US based - given the government incentives) counterparties.
- A positive decision from US Government on the US700m iM3NY loan application.
- A funding solution for progressing the AAM project.
- A funding solution for Nachu.

I also would hope that Management and the Board are taking a much stronger view on risk, risk management, risk planning, etc in their discussions around moving these projects forward. There have been too many announcements by MNS over the past couple of years which, in hindsight, it is clear have been made with Board and Management looking through rose colored glasses!