For those noting the potential capital raising - this will be discussed next week at the AGM. I suggest your factor in a share raise as an inevitable - it will be at a discount to the current trading price and will dilute your current holdings. I'd expect share raises to be justified for the following 3 items.
1. Continue to support R&D so that DRO produces products that are fit for purpose (they started out with just a GUN afterall!)
2. Cover production/logistic costs associated with fulfilling an order
3. Keep the company liquid to continue operations not associated with either of the above 2 items
They do tend to put out announcements in a row, prior to then announcing a capital raise - Im not a big fan of this but ultimately it doesn't impact on my buy decision. At least we know people are buying their product now although these sales are very small.
Refer to the AGM notice on 26/06 - i have copied part of it below
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Resolution 3 – ASX Listing Rule 7.1A Approval of Future Issue of Securities
To consider and, if thought fit, to pass with or without amendment, the following resolution as a
Special Resolution:
“That, for the purposes of ASX Listing Rule 7.1A and for all other purposes, the Shareholders of
the Company approve the issue of equity securities up to 10% of the issued capital of the
Company (at the time of issue) calculated in accordance with the formula prescribed in ASX
Listing Rule 7.1A.2 and otherwise on the terms set out in the Explanatory Statement which
accompanies and forms part of this Notice of Meeting.
Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of equity
securities that a listed company can issue without the approval of its shareholders over any 12 month
period to 15% of the fully paid ordinary securities it had on issue at the start of that period.
Under Listing Rule 7.1A, however, an eligible entity can seek approval from its members, by way of a
special resolution passed at its annual general meeting, to increase this 15% limit by an extra 10% to
25%.
An ‘eligible entity’ means an entity which is not included in the S&P/ASX 300 Index and which has a
market capitalisation of $300 million or less. The Company is an eligible entity for these purposes.
Resolution 3 seeks Shareholder approval by way of a special resolution for the Company to have the
additional 10% capacity provided for in Listing Rule 7.1A to issue equity securities without Shareholder
approval.
If Resolution 3 is passed, the Company will be able to issue equity securities up to the combined 25%
limit in Listing Rules 7.1 and 7.1A without any further Shareholder approval.
If Resolution 3 is not passed, the Company will not be able to access the additional 10% capacity to
issue equity securities without Shareholder approval provided for in Listing Rule 7.1A and will remain
subject to the 15% limit on issuing equity securities without Shareholder approval set out in Listing Rule
7.1.
(20min delay)