Smoke and mirrors IMO. The “up to $7.5m” funding limit is...

Smoke and mirrors IMO. The “up to $7.5m” funding limit is “reduced by amounts advanced to, loaned to, owed by or received by the Company from C2V and related parties”. At time of signing, $3.645m is owed by the company to C2V under the Convertible Note Facility. So, doesn’t this reduce the limit amount to “up to” $3.855m?

And the Facility needs to be reduced again by what has been “received” by way of any “advances” (i.e. typically shorter term financing), otherwise why say it? I reckon there might be significant “advances” already in place given:

1. The state of the accounts at 30 June (ie balance sheet suggested significant delayed payments to creditors, and we see this now with US legal fees etc)
2. The last quarterly which showed that as at 30 Sept there was $160k of cash or 0.08 quarters (8 days) of funding available.. and that was 40 days ago
3. The Auditor saying that there is a “material uncertainty related to events or conditions that may cast significant doubt on whether the Group will continue as a going concern”.

Yes it's positive C2V is putting a bit more cash in (but query how much really and what alternatives they had). However, lenders of last resort dictate terms. A distressed equity raising is typically non-renounceable and that ordinarily means an issue not greater than 1 new share for each share already owned. So a 1 for 1 to raise $3m (on mkt cap of $19.4m at suspension) suggests a capital raising price potentially around 2 cps.

Before shareholders commit to the new equity, I hope they get a good look at the full Facility Agreement and have a chance to quiz the independent director at the AGM. As @Jritch says, “these guys practically decide when to pull the pin and that could come at no notice to shareholders” - bullseye!

All my opinion, and do your own research.