Ann: Razorback Project Update, page-8

An update to my post above and my expectation of MGT's cash position.

After the further announcements today, I now think I have my head around what MGT have been doing with C/M Capital.

The table below sets out the cash that I think the MGT has so far drawn down from C/M Capital. However, I would have thought that there might have been some commentary around the amounts drawn form C/M capital in May and June - i.e., the plain English explanation that the "Notification regarding unquoted securities" announcement was MGT drawing more money from C/M Capital. See announcement on the dates for sources of numbers. Convertible Note face value is 1.08 times cash to MGT per agreement.

	Date	C/Notes	Cash to MGT	Possible share issue
1	13/01/2025	1,296,000	1,200,000
2	7/03/2025	1,404,000	1,300,000
3	19/05/2025	810,000	750,000	13,006,548
4	30/06/2025	314,280	291,000	5,128,995

Therefore, MGT could have enough cash to string things out for a bit longer.

I thought about why MGT opted to draw down $291,000 in the last issue of notes, and I think it is because the possible shares to be issued (see last page of announcements) means that MGT have hit their 15% capital raising limit for rolling 12 month period. Therefore, there are unlikely to be any further draw downs unless MGT get shareholder approval.

It appears that C/M Capital converted $350,000 of convertible notes to shares on 25 March 2023 at just over 8 cents per share to get 4,347,826 shares.

Therefore, the balance of the convertible notes (i.e., the amount MGT owes C/M Capital) is currently $3,474,280 (being $1,296,000 + $1,404,000 + $810,000 + $314,280 from the above table less the $350,000 converted).

If that $3,474,280 of convertible notes is converted at 8 cents, it would result in 43,428,500 shares being issued. There are currently 121,013,179 shares on issue, so that could be significant dilution. C/M Capital cannot hold more than 9.99% of the issued capital per the convertible note agreement. However, if the share price is above 8 cents, then they can convert and sell on market to stay under that 9.99% limit, making a profit along the way.

I look at the MGT share price when C/M Capital converted the $350,000 of notes on 25 March, and it was around 12 cents. Therefore, it is reasonable to expect that if C/M Capital can convert their notes at 8 cents, if the share prices goes back to around 12 cents, they might convert more notes.

If my analysis above is correct, then MGT currently have enough cash for the next 3 to 6 months. However, until C/M Capital have converted the remaining $3,474,280 of convertible notes into 43 million shares, the share price could be capped or at least have some resistance at around 12 cents.

However, anyway I look at this, unless MGT gets a way to be able to repay C/M Capital before they convert the notes, this convertible note facility will result in significant dilution.

I am happy to be corrected on any of the above.

I note that I am also starting to take the view that any capital raising agreement that is complex and difficult to understand, is unlikely to result in a good outcome for shareholders.