Who was surprised by this latest request for an extension? The odds of a further extension on 23 December are high in my opinion.
Some Discussion Points.
1. By 23 December 2022, the shares will not have been traded for ~92 days.
Q. The 'request for an extension of voluntary suspension issued yesterday was the fifth such consecutive request. Do shareholders wonder on what grounds have they the confidence to state that "It is expected that the announcement will be able to be made by Friday 23 December 2022"? It is self-evdient that the same "expectation" has failed to materialise from the four previous requests?
2. Why was the decision in Medcan Australia Pty Ltd v Cann Global Limited [2022] QDC 264 not communicated by the company to the market? A link to the decision was posted by a HC member. The dispute with Medcan was referred to in the last Quarterly Report. If it was important enough to note in that document, why not inform the market of the outcome (their application was dismissed) as well?
3. The last quarterly report noted revenue of $54,000
4. The last Quarterly Report also notes that the cash expended on operating activities was $541,000. That exceeds revenue by a factor of 10.
5. There is a related parties payment of $32,000 for non-executive directors' fees. This amount in itself represents 59% of the revenue received.
6. The last quarterly report noted cash of $8.649 million (i.e., shareholder's cash).
Is it prudent for shareholders to ask their Board about the plans to progress the company given, it is arguable, the significant changes since the millions of dollars were raised from investors? That would seem a respectful thing to do. It seems entirely reasonable to demand a detailed plan of how the remaining 8.6 million dollars will be expended.
If things continue as they have been, i.e., declining revenue that is far below expenses. In that scenario, it is hard to foresee how the expenditure of the remaining funds will directly benefit shareholders. At this rate, the funds seem destined to exist to pay out salaries and fees and administration costs at an increasing rate (see below).
The paragraph highlighted below seems very one sided - inform everyone about cost increases but are there any plans to reduce those costs. Perhaps they might start with lowering costs by reviewing, e.g., the related parties payment of $32,000 for non-executive directors' fees!
"Administration and corporate costs of 213k are on par with prior quarter and are expected to increase in Q2FY23 as shareholders’ services will increase due to the planning of the AGM and as audit fees become due and payable." Quarterly Report (my bold)
If - I have read the above correctly - costs are expected to increase and the justification for that is being laid directly at the feet of shareholders and the "planning" of the AGM.
Perhaps a couple of the pro-posters might care to shed some light on the points above?
CGB Price at posting:
2.1¢ Sentiment: None Disclosure: Not Held
