Ann: Update on Xref Pty Ltd Acquisition, page-27

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webbj

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16/09/15

18:23

Post #: 16005177
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Was away from a computer most of the day. Not the announcement I was expecting, but nothing bad either.

Gives a couple more days for people to join the ride!

Originally posted by Gladiator2 ↑

Normally with these back door plays the vendor (xref) would never agree to performance shares which are not achievable. In most cases the performance shares are not that big of a stretch.

Based on the following performance milestones we can get an idea of the financial figures in the medium term.

Performance shares in the capital of KSO convert upon the satisfaction of the following milestones:

i. Milestone 1 (833 million shares) vests once Xref has generated, during any six-month reporting period of the Company that ends on or prior to the date 2.5 years after completion of the Transaction, the consolidated sales revenue of the Company and its controlled entities (as set out in the audited annual accounts or auditor-reviewed half-yearly accounts) equals or exceeds A$2,500,000.

ii. Milestone 2 (833 million shares) vests once Xref has achieved a 20-day volume weighted average price of new shares on the ASX equal to or exceeding a 150% premium to the issue price under the prospectus document at any time within two years from the date of completion of the Transaction.

iii. Milestone 3 (833 million shares) vests once Xref has generated, during any six-month reporting period of the Company that ends on or prior to the date five years after completion of the Transaction, the consolidated EBITDA of the Company and its controlled entities (as set out in the audited annual accounts or auditor-reviewed half-yearly accounts) equals or exceeds A$2,500,000

I personally like milestone 2 the best

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I agree, some of the criticisms previously was of the high market cap. At 0.8c fully diluted its less than $40 million. That assumes the 150% premium bones shares are issued and EDITDA of over $5 million per annum. I will admit, they are not huge hurdles, but the SP % rise is directly aligned with shareholders interests and at least the revenue targets are about cash and not something abstract.

Its not super low but still has plenty of room to rise when compared to the zero revenue zero profit companies with non-proven products trading at much higher valuations in my opinion.

KSO Price at posting: 0.8¢ Sentiment: None Disclosure: Held
4 Upvote

0 Great analysis

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Ann: Update on Xref Pty Ltd Acquisition, page-27

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