How's the Capital Raise Going to Work?, page-38

@dalts66

Always cracks me up when self-appointed moderators get into a lather about a HC post.

Somehow the hundreds of shareholders with a concern about CHM who have sold down the SP from 30c to 6c don't bother you, but a poster who has taken the time to explain what many of those sellers were possibly worried about, does.

Also love the "full of unsubstantiated ideas" malarky.

Steini has posited:
- he and his investor buddies taking a majority stake in the company;
- a simple form to be signed by L1 that obviates the substantial shareholder provisions;
- IMU taking over the company;
- IMU supporting the company via an equity placement;

but none of these unsubstantiated ideas seem to bother you.

I've explained why I think the 8 quarters of funding doesn't paint the full picture. In fact its the entire motivation for this thread.

Management provided some details about the L1 finance facility in its June-22 announcement and referred to it in the Feb-23 4C, so it is not trying to hide how it has arrived at the 8-quarters calculation. However, I've never seen this type of conditional equity funding being counted as available cash (captured in Section 8 of the 4C).

It's not a question of whether management is being "truthful" (unless of course they have had conversations with L1 or the ASX, and know that for whatever reason they can't use the facility), its a question about the legitimacy of counting this facility as available cash. Investors don't like uncertainty, so some sort of clarification from management might be a good idea.

I've also explained that given where the SP has got to, I have concerns about the level of dilution and share overhang that might eventuate even if the facility can be used. With my understanding of substantial shareholder and majority shareholder rules, there is a question about the practicality of drawing down on the facility.