Regardless of the results of the next EGM, NOR can only place 10% per annum under LR7.1A. The clock started ticking on the date of the meeting: 28/11/20.
Based on current cash burn, remaining placement capacity and SP; NOR will not be able to make it through to the next AGM.
So what can NOR do:
1. Sell Spark VM subscriptions; but apparently they cannot do this without Spark ramping up market which apparently it cannot do without a Manilla call centre. Which will end first: impact of the virus or the NOR/Spark VM contract on 30/6. Imo, the contract.
2. Sign new deals. Which telco will be willing to push out a new product and marketing effort during the virus? Imo, none. Further, which telco would want to take up NOR VM if call centre support is needed for the product. The perma bulls seem unaware the rod they make for their collective backs when they try to trot out excuses for Spark VM failure. At under 1000 installs via Play, VM is a failure.
3. Extend the R&D loan facility. Possible but R&D is trending downwards since the RTO and as such, so is NOR's rebate. Considering the large Net Liabilities position and global credit crunch, what is Radium's appetite to extend more debt?
4. Cut staff/expenses. Possible. Surely NOR cannot develop the next product pivot considering the lack of runway. So what is it all the staff actually do?
5. Rights Issue. You touched on this point. It is certainly possible for yet another rights issue. It will need to be at least partially underwritten based on current general market sentiment and lack of uptake from the last issue. This will be relatively expensive and time-consuming. But I agree, they will give it one last hurrah. This will then give them greater placement capacity too.
All imo.
NOR Price at posting:
2.5¢ Sentiment: Sell Disclosure: Held
(20min delay)
