announcement out - capital raising, page-85

I thought it may be useful to open a bottle of red and extrapolate gkm's quality post based on the facts as we know them.

I will assume that what the company has stated can be relied upon. If you can't do that as an investor then you shouldn't be investing in the company. Simple as that.

Key facts:

• The company believes it has enough cash


• The company is raising money


• The negotiations are going well


• The target date for finalising a deal was end of Q1, but not been achieved


• The company will possibly do multiple deals for multiple market segments


• All prospective partners believe VitroGro works


• As of yesterday the company had no signed deals / significant news it could announce to market regarding any deal


• The price has been propped up for months

GKM's theories:

1 - The Deal is still on BUT the potentials are not willing to pay too much and rather wait it out till TIS runs out of cash and is desperate.

This is quite possible and would be a valid and prudent reason for raising capital. However, a potential partner would surely realise that TIS is listed on the ASX, has raised money in the past (and can continue to do so). TIS is also talking to other potential partners so I think it's unlikely they all think this.

2 - TIS has decided that the terms of the deal is not favoring the shareholders and better raise capital enough to take VitroGro to the market on its own - atleast in EU and in parallel apply for FDA.

I think this is unlikely as the company has said the discussions are going extremely well and the difficulty in bringing a product to market on their own will be very tough.

3 - There could be a delay of a few months for the deal to materialise. There is an institutional Investor or a cornerstone investor who wants in and given the low liquidity the only way to get in would be through a Placement - which could be at a nominal discount - i wouldnt be suprised if its at a premium. Getting a large Institutional investor gives a lot more stability to a small company.

Quite possible, although I personally believe a deal is very close and if that is the case, I doubt the company would bother - especially considering they state they're happy with the current cash levels. Also, if they wanted to get in they just need to knock on the door of the ethical fund.

4 - There is a serious threat of a takeover at a cheap price and management dont want that - so they want to raise sufficient capital to ward off any cheap takeover offers.

Possible, but seems a bit extreme. Also, if the company genuinely has interest from multiple partners this could start a bidding war which would be beneficial to TIS shareholders.

5 - The Deal has fallen through and company has decided better to go for a Cap Raising now than at a lower price - ALL sensible management do that.

Sensible to do a CR if that is the case, but would be a large blight on management, especially considering the comments from the company that nothing has changed in relation to a deal (as of yesterday). Also doubtful as the company is in discussions with multiple partners and it's unlikely they all fell through at once.

6 - The management are a bunch of incompetent white liars who have decided to rip the shareholders by their lies and false promises

Time will tell on this one...

7. (An alternate theory) All options have been on the table with prospective partners including an equity stake. As part of a licensing deal the company has agreed to an equity stake with a partner with full details to be announced before the TH is lifted. One thing against this (as mentioned by others) is no mention of such a strategic partnership in the TH announcement (not sure you can put much weight on that though).
TIS has previously stated that there could be multiple deals for multiple markets, if this is the case I had thought an equity stake would scare off other potential partners in different markets, however I think it would be the opposite. The other potential partners would stand up and take notice they had better sign a deal or seriously risk missing out completely.
If this is the case then it would explain all their statements (enough cash, no change in negotiations going well, as of yesterday there was no news to announce).
Monday's board meeting may have been to decide to accept an equity stake. Send acceptance to US/EU Monday, partner board signs off last night and we get TH this morning and two days to finalise the paperwork and prepare announcements. Any such deal would likely be at a premium to the current price and provide funds to go to finalise EU/FDA approvals. I expect the company has been talking to both retail and chronic wound companies, so it's also possible a retail company is taking an equity stake to allow TIS to fast track development of retail products.

At the end of the day, it's a fun speculating game, but nothing more than that until we know more facts. Accordingly, I think it would be better if people didn't berate management so harshly until the facts are known.

Good luck to everyone, Friday morning should be interesting...