cycliq rto into VGR, page-26

Doing a quick review today before it lists.

Like the biz here and a big positive is that much of the old register was consolidated into 18.5M fpo (sorry to any old holders) and then doubled to 37M, after a 2c rights issue, via the LM. Would have been more alarm bells if it was a 0.0001c CR, as is often the case with recaps. Also, 10M of the 18.5M rights issue was shortfall, meaning Merchant and associates likely hold a third of the old register anyway.

The 155M fpo from the convertible notes should mainly be escrowed, given they were held by the vendor (Federation Enterprises) along with the 220M of vendor consideration. That leaves the 37M old VGR register shares and 220M public offer shares. Say 250M + a small qty of non-escrowed seed that comes out (let's say 50M out of 375M total). So free-float should be ~300M or 45% of the register. That sounds about right. If they've kept it super tight, maybe a bit less free float.

Being an RTO and plenty of fpo on issue, you'd think maybe an initial pump in the first few days, followed by a retrace back towards the listing price (or a bit above) and then a more genuine re-rate in the months following. Pretty tried and true formula for good RTOs; SAS being the most recent example: 2c list -> 3c -> 2c -> 12c. Doesn't mean every RTO must take this trajectory but the nature of RTO registers make it likely.

Will be looking to jump-on as close to 2c as possible and holding a medium term core parcel + traders.