Sorry
@workingdog far too much work in doing all the comparatives and I don't have the time.
For everyone's curiosity - this is shorthand so not to the dollar on everything but have pulled the primary data from CR & quarterly reports, raising period from Prospectus/relisting in Q1 2019 to 31/12/22 which was last disclosure point.
Raisings are as follows (noting I split the raise in Nov 2019 3 ways because it was listed to be used 3 ways without specifics/breakdown):
Spending as follows (noting I have adjusted 'investment activities' amounts from JV as 50% R&D / 50% Advertising within):
Main takeaways for me here are as follows.
Note - capital raisings are to cover cash requirements for stock/equipment for business unit investment & I have assumed leased assets & staff costs are related to the hemp business primarily, as with sales. These categories ultimately offset one-another (and were not seperately listed in prospectus/raising documentation anyway) so I have kept them out of comparison to CR values.Product Manufacturing/Raw Materials
These were noted as separate amounts in raising, however ultimately cover the same thing for different units. Total raised of $6,605,333. In reality, some of the COGS are funded by sales cycling but even if I assume this isn't the case, they have spent $1.6m under budget. It is worth noting the initial prospectus included $5m which was anticipated to be utilized within 2 years. It has taken 3.5 years to get to that point, so things are very slow. Make note of the fact $2m on manufacturing & operating costs were outlaid within 6 months of relisting, so $3m of cost over 3 years excluding this.
This leads me to either (a) they capped purchasing possibly because of a slowing market (which could very much have been the case with COVID) & licensing/importation issues or (b) they did not fulfill purchasing obligations and as a result the market slowed for them/did not purchase because there was insufficient stock for larger deals. Or it could be a combination of the two & other things - it is up to interpretation as the real reason isn't clear.
R&DA
total of $4.187m raised for R&D. They spent a big whack ($1.297m) in Q1 2019 however that was related to a pre-existing commitment to Technion that they already had the cash for. The reality is, of the $4.187m they raised within the main prospectus and afterwards, they only spent $501k on+ that
includes R&D on skincare/other JV items too (post end of Q1 2019). The $825k raising from August 2020 settled towards the end of the 2020 year, but some time in Q2 (around the same time of settlement) they had ceased the Technion agreement. Did they knowingly raise funds for R&D that was never actually on the books?
And then you have the announcement about
Australian research. Which has gone nowhere. So where has $3.686m odd in the bank come from? Foregone R&D. Prudent? Perhaps. For those who invested their funds into the R&D raises
FOR R&D, i'd be just a tad offside.
Hemp Business Development & Marketing
This is the great unknown of a category. Advertising obviously an inclusion, but what else should be included here? Some R&D? Staff costs? As staff costs are being negated out by sales & R&D is its own category for review purposes, there is a $1.25m under-spend on business development & marketing. Maybe some of that is in corporate costs? Or did they choose not to continue as it was ineffective? It is simply not clear.
Bauxite ProjectsAs mine development is capitalised in the financials & there is no specific breakdown in the 4C reports for this, it is hard to judge whether they have spent this budget. Geologist costs could be in staff wages or corporate/admin. Mining lease costs & more - mixed throughout different categories. Can't make much of it.
Relisting Costs
Categorically, it is what it is. Not a concern so much because we all know the costs of raising capital, plus the amount of legal fees that would have gone into 15 odd prospectus, printing & stationary, postage + relisting negotiations etc.
Corporate & Administrative, Growth/Asia Initiatives & Working Capital
These are all really just lumped in under corporate & admin as far as I am concerned with the 4C side, along with all your other remainders. Total earmarked was $8,571,503.
From the 4C, the corporate/admin, interest & GST refund amounts net off to $4,822,000. A difference of $3,749,503.
This category is the CGB 'wiggle room'. They can slot almost anything under it, and it just seems to go into a black hole. Or prolonged until funds are exhausted by losses due to salaries & other overheads.
So why is there money left in the kitty?
Well, simply put, $1.6m wasn't spent on inventory. $3.686m wasn't spent on R&D. And excess working capital raised was $3,749,503.
These total up to $9,035,503. A bit more than the last 4C but not hugely off. Difference in raising costs on CRs & some other items too.
The Good Takeway?They can see what isn't working, and cut the costs for it. Prolonging funds within the group until something worthwhile comes up.
The Bad Takeaway?
'Something worthwhile' has supposedly been around for 12 months now. In addition to other opportunities over 4 odd years. Or more if you want to dig further. And every day this 'something worthwhile' is being 'negotiated' on, there are more costs. But there is
ZERO disclosure. Nobody knows who is employed, if they are even trading, what's happening overseas or what's in the bank. There's been plenty of 'blue sky' projects spruiked and no success, over and over.
Management got a 100% pay rise when MCL came on board, because of 'increased activities'. They have discontinued almost every single subsidiary, and therefore the pay rise wouldn't be warranted anymore. But then there's the nugget of gold in recent months whereby the CEO has taken a 50% pay cut whilst the company is suspended - and shareholders are expected to take that as a show of good faith. What an insult.
This company is doing nothing more than every day due diligence and uses it as a guise for some special suspension. Should the ASX suspend every mining explorer because they're undertaking DD on potential sites? Same principal.
CGB need to come out and say what the actual hold up is. Or get in line with the ASX listing rules, get its disclosures up to date and let holders exit.
