You can find the details in the "Notice of Annual General Meeting" announcement on 24-May. But in summary...
The company had issued 400,000 convertible notes at $1 each, and 475,000 loan notes (also convertible) at $1 each. Both issues were at ruinous interest rates
required the company to pay out the notes (either in cash or by conversion) if the company raised capital by issuing new shares. That left the capital structure looking like this:
The CRSo when the company ran out of cash yet again, clearly nobody was prepared to stump up yet more loan funds so the company had no option by to issue shares, triggering the payout condition on the notes. In addition to the CR placement shares, the company issued shares to redeem the notes, leaving the capital structure looking like this:
The consolidationBut nobody is going to stump up capital if the resulting shares are going to be worthless and untradable, which is what the result would be if you take a company trading at $0.003 with 251 million shares on the market and issue another 800 million shares on top. The resulting market value is going to be well below the minimum price permitted by the ASX. So consolidation was the only option. I think they should have gone at least 20:1 to try for a post-consolidation price of over $0.10, but they squibbed and went for 10:1 producing this:
