fund raising, page-5

So...32.7m shares representing 2.1% of shares on issue being issued at 3.2cps (a 30% discount to today's share price)to raise A$1.1m

PLUS

Secured Convertible Loan Notes raising A$6.5m with interest payable a 9% (in the UK where deposit rates are around 1% and is a big premium above the risk free rate) will cost $585,000 per year to service (effectively returning 27% of the deposit over 3 years).

Conversion is at the holders discretion where they can take 11.2% of the company (with a current market cap of around $73m) for a net outlay of about A$4.7m and which they would do if the exercise price is lower than the share price or demand repayment in full at maturity where an inability to pay puts the company's Intellectual Property on the line (I notice they didn't mention that last bit in the latest announcement).

This deal is ALL in favour of this new investor and not in favour of existing shareholders. Smells of desperation to me. What a shame.

I would have thought they would consolidate the number of shares on issue and then with a higher share price, do a capital raising...there's not much room left for discounting at current levels.

I gave up on management and sold out a few months back...but I watch in hope.