Con's of increased ownership of iM3NY- Primarily, it is the...

Con's of increased ownership of iM3NY
- Primarily, it is the illiquid nature of the investment. While Magnis is seeking to develop Nachu and the AAM facility in the US, they are incredibly restricted to accessing funds to develop these projects.

Pro's of increased ownership
- increased ownership stake was at a discounted valuation, realising additional equity for Magnis
- They stand to benefit more from any of the project earnings as well as stand to gain more from any financing associated with the project (where the valuation exceeds the valuation Magnis converted the loan to Equity)
- Conversion of debt to equity clears the liability from iM3NY accounts. By Magnis accepting additional equity, this removes a debt liability of approx $18M from the iM3NY books. Clearing this liability may greatly assist in iM3NY's current intentions to gain additional finance via the DOE/LPO, other financer or potential equity partners.

Considerations
I would say that Magnis' conversion of loan to equity is indicative of current negotiations for iM3NY finance/expansion.

- Loan was made on 31 March 2023 with a 24 month term. Interest of 10% paid annually in advance.
- Loan did not stipulate any principle repayments, suggesting MNS had a 2 year option to convert the Loan to Equity
- Loan converted to equity on 3 July 2023 (just 4 months into the 24 month term)

Magnis Placement of $10Mill on 17th July (2 weeks after accepting equity)
- Cashflow for March Quarter showed approx $13.5M in operating costs
- The $10M is not a significant amount relative to the ongoing cashflow requirements, assuming similar ongoing operating costs and assumptions revenue still not being realised

This, to me, suggests that magnis is expecting in the near term access to funds to assist in developing it's projects. This could be Finance for Nachu or the AAM facility, or (what I believe to be more likely) accessing funds through a Finance/Equity agreement with iM3NY.

People can obviously speculate what they wish, but this is how I am interpreting the actions