Issues are relatively simple. 1. Value of deal today to existing...

Issues are relatively simple.

1. Value of deal today to existing shareholders. Looks good, vendors and SRT are sharing risk and upside very well between themselves.
2. Balance of money flow in transaction. OK, so MW has put the deal together and should make some cash, but (big but) he has duties as a director of a public company. He is benefiting from the upside to the options at 0.08 when he put up his cash (real cash) which is OK. Cicero is also getting underwriting fee, hopefully it is small because the announcement says "lots of support for the capital raise" at 2c. IMO, MW should escrow most of his equity. See point 3.
3. Properly, the equity hurdles for the vendors are effective after FY19. That allows management FY17 and FY18 to invest in business development, sales, customer support etc. However, that also provides large incentives for profit enhancement (i.e. a pause in investment) in FY19 to boost profit. That means that shareholders are not going to get good visibility of performance (profit) until FY19. IMO, that is a (very) strong argument for escrow of MW's equity and options until the period in which visibility on the acquisition's performance is available. MW will get cash from the underwriting agreement and director fees (and the services provided to SRT for coy sec etc.). IMO his equity returns should ve post FY19.

patient fellowes111