Hi all,Good points.I was a holder during the KTG vend.Remember...

Hi all,

Good points.

I was a holder during the KTG vend.

Remember the consolidation and dilution are separate parts to the equation.

S3R to KTG was a 57 to 1 consolidation based on a 0.035 last close for S3R. This is to comply with the ASX's 20 cent rule. If we need to comply with that rule we are looking at a 25 to 1 consolidation based on a 0.08 last price - this does not affect the percentage of the company you own but means shares are now 'worth' 20c each and new capital is issued at that price.

Next comes the dilution to pay for the purchase. To purchase K-tig, it cost in basic terms, $16mil worth of issued shares to the vendor and $5 mil via public offer for working capital. They also paid something like another $3+ mil for advisors, directors, and for those who provided capital to K-tig right before the vend, via further share issue. There were/are also further shares to be issued if future milestones are achieved. This was the K-tig dilution. You now own much less of the company but hope the company is worth proportionally more than the dilution has taken away as Ozgoldtrade pointed out.

Ultimately, you just hope they get something really good for really cheap and therefore do not have to issue too many additional shares for the quality/value of thing you are getting.

Cheers - GLTA