Management's performance here has been less than adequate IMO
- SI6 is currently trading at all time lows. at 0.4c our market cap is $1.83M, with reported cash holdings of $1.16M as of last quarter, that puts out EV at under $1M
- The Mirroplex deal was scrapped on 19-10-2018. Since then, there has been little communication from management or new deals announced to the market
- The corporate costs here are extremely high. Despite the stock effecting being a shell, it has spent $436K+ on admin/corporate fees in the last 6 months, with another $250K forecast for this quarter.
- A review of the annual report shows the benefits to directors and related parties.
For a shell, this is unacceptably high in my onion. Given the limited cash balance, and the fact the business would have limited matters to attend to in it's current state, there should be a complete freeze on director's fees until
A) a new deal is announced B) a capital raising conducted C) a reduction in their fees announced once resumed
- Corporate overheads / directors fees will chew through the remaining cash balance within the next 9 months at the current rate, leaving no funds for acquisitions.
- This latest "unmarketable parcel sale facility" is on the nose and wreaks of hypocrisy. So in order to "reduce administrative costs" SI6 is proposing to buy back some 30M shares from some 2,073 shareholders at all time lows. I question the cost these 2,073 minority holders incur SI6 each year to have as shareholders on the register, vs the last 6 months of corporate overheads and directors fees. Would a reduction in directors fees not be a better way to "reduce administrative costs" and in a much more substantial way ?
Further to this, the group leading the facility is Xcel Capital, who is run by SI6's ex-Chairman
Should the entire 30,482,046 shares be acquired, it would make the purchaser the second largest holder on the register, and acquired at all time lows.
It seems somewhat unfair to holders for management to continue incurring such absorbent corporate and directors fees each quarter, meanwhile in order to save costs, proposing to have a related party buy back some 30M+ shares from some 2,073 holders on an opt out basis and at all time lows.
Shareholders have till 26th March to opt out or have their shares automatically acquired.
SI6 has 457,503,153 shares on issue according to Iress, meaning to call a S249 the relevant 5% needed is only 22M shares. I hold/control near 10M personally with family and friends and am in discussions with others on the register who hold similar amounts.
My proposal here would be for a full board clean out, a reduction of admin/corporate overheads to as low as possible and instant freeze on all directors fees and related party payments until A) deal sourced B) capital raised
SI6 could do as little as confirm management are freezing wages till a deal is done, reducing quarterly overheads to a more reasonable level, actively seeking projects in the XYZ space and this would me at a much higher price IMO, however they haven't.
If shareholders have an interest in supporting a S249, I'd like you to contact me at the below address with name and holding amounts. Be assured, you'll remain anonymous until such point that we chose to decide to lodge any formal applications to the ASX.
I know directors vastly experienced in both the resource and cannabis sector that would be prepared to come on here for performance based schemes, introduce projects and seek to raise capital at a more respectable level than we may currently be facing.
There is some degree of urgency here, given that should Xcel Capital receive up to 30M shares on 26th March 2018, it will present somewhat of a blocking stake
Here's to a much better SP
SI6 Price at posting:
0.4¢ Sentiment: Buy Disclosure: Held
(20min delay)