Ann: Response to ASX Aware Query, page-94

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moorookamick

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15/01/20

12:40

Post #: 42390574
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Originally posted by moorookamick: ↑

IMO, the ASX are away ahead of us in their analysis and we have to decide on what outcome that would benefit us most
-that CLi returns trading backed by the Atlas deal (massive dilution for retail shareholders)
-that CLI is de-listed by the ASX (We'd be at the mercy of the board without ASX regulation)
-that CLI is put into administration but remains listed on the ASX
-that CLI is forced to declare bankrupsy
-that CLI lets Logical Cropping go bankrupt* in the USA & plants a small hemp crop in Aus etc. (100 acres of trimmed flower for export to the USA
could be very profitable, IMO. 100 acres could produce 60K lbs of trimmed flower & say $250 USD/lb -total revenue of $21 mil AUD)

From those possibilities we have to decide which would suit our interest best.
There are essentially 2 paths to recovering some of our losses, IMO:
-(a) that CLI is kept alive and over time so we may be fit to claw back some value via the strategy beloe (+ the possibility of litigation)
-(b) that CLI goes bankrupt & shareholders loose short term ( + the possibility of litigation)

There are arguements for both (a) & (b) but I'm inclined to favour (a) which means that I dont favour too much shareholder action which might
tip CLI into bankruptcy or administration.
IMO, if CLI declares bankrupcy, the current board & management could pick up the pieces at firesale for two bob.
Again IMO, if CLI has an administrator appointed, he/she will likely firesale assets, (if any given that Atlas nearly owns the lot) and then wind up the company.

*NZ Airlines did this with Ansett in the late 1990's and it did not damage NZ Airlines!

My preference is: that CLI bankrupts Logical Cropping in the USA (this would cancel the Atlas & US harvest debt) and position CLI
to grow a small profitable hemp crop in Aus in 2020. This option would have the lowest dilution & potentially the best outcome for retail shareholders.
A hundred acres of trimmed flower would likely cost $2 mil and the loss of the hi-tec irrigation system would not be a great loss because it di not
produce the targeted biomass or CBD in 2019.

Atlas took a commercial risk and securitised that by putting a blanket lean on CLI's assets. Virtually all CLI's assets are in Logical Cropping and even
if CLI has to forfeit its Crop Logic irrigation systems , that would not be a monumental loss, IMO.

All IMO, only and shareholders should consult a professional before taking any action in these issues.

Expand

Just to summarise the above post with the best strategy for shareholders:

-That CLI lets Logical Cropping USA go bankrupt cancelling debt and that
CLI grows 100 acres of trimmed flower in Aus this year at say a cost of $2 mil &
a potential revenue of $20 mil+ at today's prices.

As such we can capitalise on our failed $10 trial farm experience. We just could have
2 consecutive crop failures!

All IMO only.

CLI Price at posting: 3.1¢ Sentiment: None Disclosure: Held
1 Upvote

0 Great analysis

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