AVZ (ASX) Ann: ATM Facility, OTCQX and Section 708A Notice

Originally posted by donegaldemon: ↑

I think a few are missing the point here with the ATM subscription agreement .
So it looks like AVZ want more exposure to the US markets and the listing on the OTCQX is probably their best way to do so , it opens up liquidity for AVZ without having to do SEC filings or pay a high price for a NYSE listing .
There are a few OTC listings AVZ can do , OTCBB , OTC , and so on , but OTCQX has the more stringent financial and reporting requirements and has been used by companies in the past if they are aiming to ramp up or transition to an exchange listing ,i.e AVZ listing on the NYSE or something similar .
One of the requirements for an OTCQX listing is for the company " To have U.S $2 million in total assets as of the most recent annual or quarter end " .So the ATM subscription agreement will guarantee that AVZ will always have sufficient cash on hand to meet the requirements for an OTCQX listing , a smart move by management in my opinion and its good to see them thinking a few steps ahead .
The ATM has a maximum of 83 cents , so 60 million shares for AUD $50 million .
So an investment house is willing to offer cash with that as the top . 83 cents is currently a 33% premium to market price and they would have only approved that maximum with an additional upside in mind .
So we have Cantor facilitating the fire side chat with US investors and now the ATM subscription which will guarantee the OTCQX listing ,, looks like little old AVZ wants to make a few ripples in the USA !!! This is pretty bullish news folks and its gotten me all warm and fuzzy Once the license drops and we get our US lisiting i reckon we may see some serious cash being poured into AVZ from the states !!!
Exciting times ahead .

https://www.investopedia.com/terms/o/otcqx.asp

https://www.colonialstock.com/otc-listings.htm

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Regarding "The ATM has a maximum of 83 cents , so 60 million shares for AUD $50 million ."

The announcement described the 60 million shares as "security" and in the associated Appendix 2A that was published on 3rd Dec 2021, the term "collateral shares" was used.
I interpreted this as a deposit for the ATM facility. I do not think that there is an upper limit to the issue price of shares to be issued under this ATM facility (unlike the 83 cent maximum price that you mentioned). I think the 60 million shares is held by Acuity Capital just in case AVZ does not issue shares for cash redeemed via the ATM facility within the next 27 months. It is my interpretation that the 60 million shares will be returned and cancelled (i.e. return of deposit) at the end of the ATM facility if the correct number of shares were issued to Acuity Capital during the term of the ATM (depending on SP at the time of issue).

Example case:
Acuity Capital currently holds 60 million AVZ shares. Say AVZ SP rises to $1.00 and stays around that region long enough to result in a VWAP of $1.00. AVZ then redeems $50 million via the ATM facility and issues another 55.5 million shares (assuming 10% discount to VWAP i.e. $0.90) to Acuity Capital in return. The ATM facility then ceases and Acuity Capital returns the initial 60 million shares (collateral/security) back to AVZ, thus ending up with 55.5 million AVZ shares bought at $0.90 each and AVZ with $50 million in the bank.

I think Acuity Capital only gets to keep the 60 million AVZ collateral/security shares if AVZ is unable to issue more shares to them in return for money withdrawn from the ATM facility e.g. if AVZ has issued more than the 15% share on issue/year limit, etc.

All in all, I think that this is a great step for the company to have such a convenient access to capital at market price. To also put this in perspective, it seems to me that Acuity Capital would rather have AVZ shares than an interest payment in return for their capital.

AIMO. DYOR.