This is interesting. Maybe my logic is wrong. The New Shares start trading on the 5th April, but holders have until the 27th April to decide on taking up the offer, or not.
If between these dates the SP falls to 1c, or less, then many holders may not bother. So, unless trading the new shares, it must be that many /most SH will wait until nearer the 27th to make that call. Why on earth would anyone apply early and take the risk?
You would have to think that the shortfall mob, and house broker will do everything they can to support the SP to ensure it stays above 1c within the above period. I would expect see 'feel good' news to be forthcoming to support same.
There is also a note to say that the entire offer will be withdrawn if they don't get to 50%. Most unlikely, but how would that work with the ASX if millions of new shares have been traded?
Lastly, I note that if only 50% is raised, it will cover expenses for only 6 months. Thus the raise in full in about day to day expenses for 12 months.
With the experience of the last few years, is a 12 month window going to make the business profitable, or at least have sufficient sales that profitability is on the horizon? There is every chance there will be another CR within the next 8/9 months unless sales and revenue start going uphill very quickly.
OSL Price at posting:
1.6¢ Sentiment: None Disclosure: Not Held
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