Ann: Strategic Review Progress, Business Update and FY23 Guidance, page-106

I feel for remaining holders who have yet again been taken for a wild ride by the company noting the deeply discounted capital raising announced today.

Here is my post when I sold out at the last major negative trading update in early Nov 2022. It was painful to sell at that price and then annoying it went up a little in the months that followed. I am taking comfort now that I did sell so I don't have to worry about this company anymore.

In this quoted post, I flagged my concerns then about the capital raising potential given what they said in that announcement. Unfortunately, that's come true.

I still hold my views that it would take a lot of time before the company gets back to profitability - if it does. And your capital will be tied up for that long - at great risk but also without any reasonable chance of a dividend until they generate "significant free cashflow" (as mentioned today). Also note, the significant increase in share count so any potential dividends in a few years time is unlikely to be large, given the headwinds on revenue and the increasing pressure on costs. Something to bear in mind for deciding whether to average down or participate in the capital raise.

One of the qualitative things I noticed outside the quantitative is the cultural aspects. That is, there is "high attrition" which says much about the culture and work environment. Having that high turnover and constant pressure on recruitment costs and time, doesn't lead to great outcomes. They also flagged too many client driven customisation which adds to costs and/or is low margin revenue, and takes away time to grow the business profitably in other areas - but if you don't agree to customisations demanded then you may lose the contract or not have renewals. Not an ideal situation when the business is not doing well.