Ann: Quarterly Activities/Appendix 5B Cash Flow Report, page-7

It's a rather busy looking quarterly when read without any background memory or historical or macro context. Fortunately most punters on these threads aren't new and are well-versed, with decent memories.

Interesting to see the CEO signalling an entitlement offer at the bottom of p.4 of the Cash Flow report (Appendix 5B). An entitlement offer is simply one type of capital raising. Examples, in no particular order:
- Placement (to instos/sophs/HNW).
- SPP.
- Entitlement Offer (aka Rights Issue).

Signalling that a EO/RI is on the cards sounds about right. No hard-and-fast rules, but SPPs are generally only done, if at all, in conjunction with Placements (i.e. as a mechanism to offer crumbs participation to existing holders when a Placement for the bulk has already been performed immediately beforehand).

Entitlement Offers (Rights Issues) are a much more democratic mechanism that involve all SHs in direct proportion to their relative individual holdings. That's what was done for the large (~$70M) raising back in 2018 by (then) differently comprised Board.

In many respects, the absence of a Placement tells us what we already know. Very little appetite by instos/sophs/HNW. So, with that window currently closed it really only leaves a EO/RI as the next available mechanism to scrape the barrel with.

The ASX 15% (p.a.) limit for issuance of new shares auto-reset earlier this month (start of new FY). Sans obtaining formal SH approval (via EGM or AGM), only 557m new shares can issue this FY (i.e. 3,713m current SOI x 15%). Multiply that by a suitably discounted offer price of, say, 0.3-0.4c/share gives an est. max raising of $1.6m - $2.1M (net, after, say, 5% costs). Naturally that assumes a 100% take-up of all new shares on offer. However, if RTR's recent experience is any guide it will likely only achieve a fraction of that.

There will very possibly also be a chunk of free oppies included to sweeten the offer. Sadly, they'll be worthless in the fullness of time without any material discovery or corporate deal that can fundamentally move the value needle. Sans any such event, the overhang of said oppies would act to further hobble the SP until the oppies expire (worthless). In the current context that POS finds itself the oppies would be just a raising lure, nothing more. Basically, exacerbation of the negative feedback loop in which the only beneficiaries would be the Board members and staff who continue to draw cash from the business for a bit longer.

Finally, and this is definitely reading between the lines, it looks like a restructuring/recapitalisation is off the cards for the time being. If that's an accurate read I can't say I'm surprised that it's not a viable option without an opportunistic white knight on-hand to pair it with. (Even if that eventuated, existing SHs would wear the cost via massive additional dilution, which isn't something to hope for.)

All of the above comments may well end up being academic if the market does what markets do and continues to pre-empt the eventual outcome via the ongoing daily auction (#slowmodeathspiral).