Next Investors having a say from their latest email:The small...

Next Investors having a say from their latest email:

The small cap market is risky, things do go wrong…

In the last few months two companies in our Portfolio have had disastrous results, Tempus Resources (ASX:TMR) and BOD Science (ASX:BOD).

BOD announced this week that it was unable to close out its $2M capital raise that it started and, after being in a trading halt for a few days, went into voluntary administration.

This came as a surprise to us... especially considering we committed to an Investment and transferred the first tranche of cash as part of this failed cap raise.

There isn't much to say here yet other than we will have to wait and see what the administrators have to say in the coming weeks/months.

Usually, when this happens, the administrators either look to sell off parts of the business to keep the rest of it alive OR they look to recapitalise the business with a capital raise from elsewhere (spoiler alert: the raise terms will likely be very favourable to the new incoming investors.)

It always hurts when one of our Investments fails, and we are usually prepared to have some losses as part of our diversified Portfolio approach to Investing in small caps.

BUT to see one of our Investments go into administration always stings that little bit extra.

Hopefully, the process isn't a long one, and we see BOD recapitalised and trading on the ASX again at some point.

For now, we have moved BOD to our Bottom Drawer Portfolio.