Fast Forward 2 years......., page-114

The half year report is very interesting.
Firstly, even the independent auditors over at KPMG, who know more than most here, think that there are issues with SAS operating as a going concern. Meaning, their opinion is that the Company will be bankrupt in 12 months time if they do not raise sufficient funds from equity markets.

Secondly, take a look at at this - 48 million due before 31 December 2018. I remember Hunterr telling me that this number has decreased significantly since 30/6/2018, yet it has increased by 16million from June. Another interesting tidbit is that the $48million only factors in costs for 1 launch only. We all know that the Company is pinning its hopes and dreams of securing US debt funding for the launch costs, which are $10-12m USD, so call it an even 15million AUD. I've invested and seen so many junior miners, IT startups who all said the same thing - "negotiations are advanced with various banks" and nothing ever came from it. 




I do recall some people on this forum (not naming names) saying that the Directors have not participated in previous capital raising because they are not Australian residents - this turned out to be a blatant lie. Any director can receive shares from the Company but the ASX listing rules and require shareholder approval for Companies to issue shares to related parties (Directors). No shareholder approval is required for Directors to purchase shares on market, by the way. The fact of the matter is the Directors put in the money in the Company for 2 reasons - 1) to alleviate retail holder concerns about not putting any skin in the game and 2) the Company was struggling to attract interest from other investors. They had the opportunity in all prior CR's to buy in, why only get in now? 

I remember the original term sheet for this recent raise was at 4.5cents(?), given the 2 weeks+ of suspension the potential investors were not happy with these terms and had SAS by the throat in negotiating this price down to suit them, including some free options. A 44% discount is very indicative of this and is never a good sign and shouldn't be striking confidence in anyone. 

As others have mentioned, if the technology is so advanced, with such high high potentials for the Company, why was it a struggle to raise this capital, even at 3 cents. Surely the big boys will be buying up and getting in quick smart with such low prices. Smart money talks and frankly it seems that smart money is avoiding SAS, otherwise there would be some well known investors involved now.

Someone here mentioned that the money was pretty much in the bag in December but wasn't finalized due to Christmas - what sort of rubbish is that? Even if this were true, this would be even more concerning if it takes 3 months to finalize the terms of a relatively simple CR.

The Prospectus says $5.4m will be paid to Gomspace for presumably construction costs. Gomspace said they slowed their work on construction until payment was received therefore one can safely assume that whilst construction has commenced sometime in November/December after CDR was completed, it was likely at a snails pace. $5.4m equals roughly $340k per nanosatellite - which is very very low compared to what it actually costs to build a nanosatellite. For example in the financial report it says that the 3 Diamonds (ie 3 nano-satellites) cost $3.4million to build, so around $1m each. This doesn't add up. I'm almost convinced that the Company won't have enough to even build the first batch of 16.

There is so much risk involved with this Company it makes my head spin. To answer the title of the thread - fast forward 2 years, I think the Company will no longer be on the ASX and there will be many lessons to be had.

All IMO, DYOR.