I haven't seen a summary of what is actually happening with the number of shares and cash collected.
Why wasn't this in any of the company's presentations?
Feel free to make any corrections or clarifications if I have any of the facts wrong or something is unclear.
|
| # of Shares (m) | Price | Capital Raised | Capital Raised (if options are exercised) |
|---|
| 1 | Current Shares | 168.000 |
|
|
|
|---|
| 2 | Options - Existing Loyalty Offer (2 for 3) | 112.000 | 0.15 |
| 16,800,000 |
|---|
| 3 | New Subscriptions | 63.334 | 0.075 | 4,750,050 |
|
|---|
| 4 | Options - New Subscription (1 for 2) | 31.667 | 0.15 |
| 4,750,050 |
|---|
| 5 | Lead Manager Options (i) | 10.000 | 0.15 |
| 1,500,000 |
|---|
| 6 | Lead Manager Options (ii) | 9.500 | 0.15 |
| 1,425,015 |
|---|
| 7 | Total Shares After Options | 394.501 |
|
|
|
|---|
| 8 | Increase in Shares | 134.8% |
|
|
|
|---|
| 9 | Current Shareholder % | 71.0% |
|
|
|
|---|
| 10 | Total Capital Raised |
|
| 4,750,050 | 24,475,065 |
|---|
The options are able to exercised at $0.15 on or before 31 March 2023.
So, if the options are in the money at 31 March 2023, there could be a sizeable cash injection in the company, plus the equivalent increase in the number of shares.
It makes it tricky to value the company when there will be 231m shares on issue (after the new subscriptions), plus options of another 163m (70%) waiting to vest in 2023. The dilution of shares and cash (potentially) coming in from options, along with new products (cost to get to market, revenue coming in) and other factors just add to this difficulty.
It is also worth nothing that the options issued to existing shareholders (Loyalty Offer) are
non-renounceable.
They cannot be traded or exchanged on the ASX. I have seen a couple of comments on this thread that miss this point.
But, options to the new subscriptions as part of the Placement are able to be traded.
Can someone confirm my understanding of this?
I am looking at whether it is worth investing on a speculative basis. I was a holder a few years ago, but sold in 2017 (around then, I think) for around 3.7c (in the old OBJ price for a loss). It is possibly better to buy on market now than be part of the new subscription. Even paying a bit more to buy on market (prior to 5 March) you get the benefit of getting more options (2 for 3, rather than 1 for 2).
One issue is that the company is getting $4.75m in cash, but it will burn through that cash well before 2 years (prior to the options vesting) unless they increase their revenue from the horrid amounts they posted in their last two 4C announcements ($120k and $144k for Sept and Dec respectively). Yes they are getting some R&D rebates, but this is not enough to sustain the company. Also note they are increasing wages and other costs.
New products are coming. But the last presentation really didn't fill me with much confidence. There is a vision there, but they have been beating this drum for a couple of years.
What does it look like for those who invested in the OBJ/Wellfully dream?
If you purchased OBJ at the old 1.5c price, just before the consolidation, you are well in the red, even after taking up your full entitlement offer. Your investment is worth just 31.2% of your capital you invested. And if I had of kept my shares, instead of selling at 3.7c, I would have lost a further 87% of my money, from that point.
|
| # of Shares | Price | Value |
|---|
| 1 | Initial Investment (pre consolidation) | 1,000,000 | 0.015 | 15,000 |
|---|
| 2 | Consolidation (1 for 20) - July 2020 | 50,000 |
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|
|---|
| 3 | Entitlement Offer (1 for 3) - July 2020 | 16,666 | 0.10 | 1,667 |
|---|
| 4 | Total Today | 66,666 | 0.078 | 5,200 |
|---|
| 5 |
|
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| 31.2% |
|---|
I know that a few people on here have purchased a significant amount of shares at higher prices. Some have speculated at low prices, but still have lost thousands. This company just has been a rough ride for shareholders.
In summary, I just can't see a compelling reason to invest in Wellfully right now. There are just too many questions without any good answers. I just see too many other companies with a more successful track record who are actually delivering on their plans and whose share prices have the potential to increase 10x. The Wellfully share price could continue to drift down until some significant revenue starts to come in. I will continue to keep one eye on Wellfully, but I won't be investing until it starts to succeed, but there are no guarantees that success will happen.
(20min delay)