Ann: Share Placement, page-16

This entire exercise is somewhat unfortunate.

First, why use a rights/entitlement issue? They are almost always undersubscribed, but the take-up here was particularly embarrassing (17m taken-up out of 133m offered).

Second, the take-up (at 2.1c) was so poor, that the Co (presumably short of cash) had to do a placement just a few days later at 1.5c. This is rather an insult to the loyal shareholders who just coughed up for the entitlement issue: what kind of entitlement is that -- an entitlement to lose money immediately?

Third, the placement was issued under L7.1A which contains conditions to protect shareholders from abusive practises. These conditions include a maximum discount that can be issued to placement shareholders, and that maximum discount is 25% (relative to VWAP over previous 15 days). In this instance, the Co issued the placement with the MAXIMUM discount they could ... the full 25% (or thereabouts). That is not a good look.

Fourth, even then, the amount raised via the placement ($184K) is so small that one can only imagine that more of the same will be needed ... which instead of getting the company out of the raising cycle, instead seems to place holders in something of a vortex.

Fifth, if a company cannot sustain itself, the first place to start is to cut its own costs, and there is no better place than to start at the top.

Six months ago, they were doing placements at almost 4 times the present price point. That is a remarkable change in just 6 months. Perhaps someone else could comment on what has caused such a dramatic change in sentiment in 6 months.