Yeh thanks mate but you did quote a 17% full cost on the capital...

Yeh thanks mate but you did quote a 17% full cost on the capital raised and I just wondered how you got to that.

I think your reasoning is sound but I do feel that your first two flags are addressed in the annual report and the presentation supplied with the cap raise. From the annual report

Operating Expenditure and Cash Flows Operating expenditure and cash flows varied through the financial year accounting for:
 Increases in inventory: Material expenditures position the company to achieve the significant sales growth through the end of the financial year.
 Investment in sales and marketing: Resulted in a US$0.95m increase in selling expenditures, and contributed to the growth in expenditure over the prior comparable period. The Company’s sales and applications team grew from a team of two to a total of nine professionals and contributed to a corresponding increase in the sales pipeline by year end.
 Completing obligations for the nanotron acquisition: The Company paid the remaining US$2.2 million to finalise the acquisition. No further acquisition related costs are outstanding.
 Ongoing R&D: Variable expenses increased primarily in software and chip development R&D programs for the IoT system division. The Company changed strategy to incorporate other chip IP into next gen products and save R&D cost. The small increase in research and development expenses of US$0.1m is partly a result of some fairly large projects in chip development and software having a heavier burden of cost in FY19 over FY18. The focus in the second half of FY19 was to shift to partnering in non-diferentiable technology areas to reduce the internal costs. This leverages our technology in combination with other firm’s products as a means to increase speed to market and time to money. This has reduced overall R&D costs on a go forward basis. Overall, there was a substantial increase in operating, overheads and administrative expenses for the year of $US2.3m. This increase reflected costs incurred in building out the organisation following the acquisition of nanotron and the appointment of a management team based in Woburn, Massachussets in FY18. It includes the transitioning of nanotron from primarily a R&D focused organisation to a sales focused growth company including improved operational capability and supply chain logistics to enable the longer-term ramp of sales. This transition is Annual Report for the year ended 30 June 2019 7 substantially complete, and at the end of FY19 a permanent reduction in costs was undertaken. Management continues to control spending without inhibiting growth. The Company will maintain its resolute focus on cash conservation by controlling operating expenses and minimising increases in headcount.

So company flagged increase in sales staff and reasons why (more sales). They flagged increase in inventory and reasons why (bigger pipeline). They have also spent money on increasing manufacturing capacity and diversity (announce 26 June - relates to diversifying sales and increasing capacity to deliver). They aren't red flags imho, but necessary for growth, as is the cap raise to allow them to meet the growth. And what makes a company like this fall over is that they grow too fast and don't have capital to meet orders which then causes future revenue issues and the house of cards comes tumbling down. If the cap raise meets sales growth and capacity issues then it should be money well spent, not money down the tube. The red flag for me is the fact previous commitments have not been delivered on but still the business case as presented to me currently, if delivered on, appears sound.

Time will tell