Ann: YPB Group secures $2m At-The-Market Subscription Facility, page-2

OK, so the ATM provides YPB with up to $2m of standby equity over 3 years. It allows YPB to directly sell newly issued shares into the trading market through its designated sales agent Dolphin Corporate Investment.

This $2m of funding won't go far given YPB burns $600k and more of cash every quarter. While YPB can still and will need to find other ways to do capital raising, it's the dilution impact of dumping massive quantities of YPB's shares in a short time period that is going to be the problem.

On yesterday's ASX share activity summary for YPB, there were 39 orders to buy at 0.2c of 45m shares, 6 sell orders at 0.3c offering 10m shares in round numbers, nil volume traded at 0.3c. This is a true reflection of the current interest in YPB's shares which were trading in the range 0.25c to 0.4c for the past month.

Given that YPB needs at least $500k of funding per quarter, based on the need to sell shares to provide this amount, YPB would have to set a bottom price of 0.2c or less per share. knowing that at 0.2c there are at least some buyers. At a sell price of 0.2c to net $500k it involves a dump of 250m shares and it doesn't take much to imagine the dilution impact and heavy downward pressure on their share price and there could be 3 other similar share dumps in the coming 12 months.

To raise $2m at 0.2c per share, that's dumping 1billion new shares into the market, to add to the 880m shares currently issued.

This is the bind which YPB finds itself it, and much of it is due to their very weak revenue stream.

This standby equity raising doesn't help YPB's other major problem of $1m of debt due to the convertible note issue.