As an Australian investor we have the protection of the ASIC and its oversight(thats a joke) and when and offer is made to shareholders' or public an offer document must be produced (prospectus, information statement Inforomation Memorandum etc) which directors or liable for the accuracy of the statements held within the document.
When you are registered Overseas, the protection applies in that jurisdiction. In the case of US then registration of the offer document through their regulator and lawyers to draft the document under their legislative requirements and for their oversight costs money. Anecdotally I have heard it is in the vicinity of $500k, to enable investors to take up their rights so it becomes a cost benefit analysis. In most cases for small caps the cost oways the benefit!!
Better to just offer the stock after the rights issue closes as a placement.
Gees this explanation is all so legal and thankfully I am not a lawyer!!!!!
Good luck to all HC's on SBN.
& to tradingfreak sorry I have taken a while to get back to you.
SBN Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
