Hi Yanlin
Thanks for an informative post. A convertible note at an aggressive price compared to a placement at 80% of current prices is much more acceptable in my view.
In terms of people being well fed, have a look at the cash flow statements for Apr to Jun and July to Sept 02 (See note 1.24). The sum of payments to directors and related entites is $669,896 for the 6 months. You can understand shareholder concern as for that kind of money you would expect deliverables not openended deferrals. If we were cashflow positive and FNT was put to bed, I presume no one would complain at such renumeration, in fact, people would be applauding the directors.
Yes dillution is a big concern. No one to date can yet explain to me why we need to aquire FNT. Why not just simply give them a better price than their current wholesale supplier. To sweeten the deal, you offer them a JV Re: prepaids in China. The result, no dillution for ATC shareholders and we still get the 220m in revenues. People talk about vertical integration and this and that, but at the end of the day, why do you want to share your profits with the FNT vendors and let them be the biggest shareholder in the company?
While FNT remains on the drawing board, the cash flow issue is a big concern. Put simply, if ATC only collects up to 30% of December quarter revenues in the December quarter then there could be big problems.
We wouldnt have this problem if FNT was put to bed when initially planned as FNT retail revenues would now belong to ATC, hence effectively no waiting to collect the FNT debtors. Come to think, perhaps thats the reason they wanted to aquire it?
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