My understanding is that the company loaned the money to some employees to buy the shares at the price of 9c and 10c.
11mil shares at 9c = AUD 990,000 3.5mil shares at 10c = AUD 350,000
Total: AUD 1.34mil of LOAN from the company to the employees.
It means 3DP receives ZERO cash from this issue of 14.5mil shares.
Because it is "limited recourse loan", in case these employees cannot repay the loan in part or in full, the company can only claim the shares bought with this loan money.
If the share price is higher than the issue price when the loan is due, the employees can sell the shares, repay the loan in full, and pocket the profit.
If the share price is lower than the issue price when the loan is due, the company can claim the 14.5 mil shares ONLY and not a single cent from the employees.
In other words, free money for the employees, and no money for 3DP.
3DP Price at posting:
9.5¢ Sentiment: None Disclosure: Not Held
