I am a long term holder of CRO, first time poster here.
I found the prospectus announcement yesterday confusing. I also found the way in which Cirralto were to acquire Appstablishment unclear.
I base decisions on fact, so this morning I emailed Adrian Floate and he replied within 1 hour (on a Saturday morning).....don't know if too many CEO's who would do that.
Anyway here are the questions I asked and Adrian's response......
Hi, My wife and I are both shareholders of Cirralto (CRO), could you please explain the following questions:
Thanks for reaching out and your questions. See my answers inline below.
Have a great weekend.
Thanks and best regards
Adrian Floate
Managing Director
Cirralto
Q1. The Prospectus announced yesterday 7/5/21, the reasoning behind it and implications. I find it confusing?
Adrian Floate:
"The shareholders in the company exercised options and the company is required to lodge a prospectus to advice the market when such events occur via the prospectus and Appendix 2A. There are no implications other than the issue of shares. These have been part of the capital structure for several years. I completely understand the confusion it took me some time to get familiar with all the different lodgement requirements and what they are for." Q 2. How is Cirralto acquiring Appstablishment? How is the financial transaction being conducted. Is it a monetary value or shares or cash? Please explain?
Adrian Floate:
"Please read the NoM of meeting and the associated resolutions. These thoroughly explain the answers in accordance with ASX and ASIC requirements. The short answer is no cash and 825m shares."
Q 3. When Cirralto acquire Appstablishment what are they receiving as far as assets are concerned. Other than software? Is there any property, goods, etc?
Adrian Floate:"Cirralto receives the team, the IP, existing contracts and all other real property / assets owned by the company at the time of the transaction. It is a software business so these are the principle assets. The transaction is much more alignment and readying ourselves for the next phases. Successful companies own their IP and have universal asset alignment to ensure they have the ability to earn IP returns, can eliminate and fully control of variable costs (were possible) and have the ability to set pricing to the market without consideration of 3rd parties. Extinguishing the license delivers the above and changes our profile with large investment firms and institutions." 4. Why was none of the above covered in announcements to shareholders via written material or in the webinar?I feel the share price has dropped due to a lack of foresight/transparency
Adriane Floate:
"All of the above have been exhaustively covered over at least the past 12 months. Yesterday’s session assumes the above materials have been read and understood. I feel the resent decline in value has come from speculation and rumours surrounding certainty of the Appstablishment transaction and a misunderstanding / misinformation around the process to complete coupled with selling form option holders who are capitalising on a 3 x multiple. We are the same company we were a week ago, our focus as a company remains completing the transaction, growing our customer base & ARPU with compelling solutions and reposition our investment profile with larger players looking for strong technology stocks in their portfolios."
I am very happy with the clarifications, factual information and prompt reply.
Everything is as it should be,
I like that they have skin in the game!!
I buy shares for the long-term, companies who are disruptors with vision.....
My shares are staying in my hands........
IMO Please Do your OWN Research
(20min delay)