LNG Chart, page-163

I don't think the company will be able to raise funds from normal retail shareholders without first issuing a disclosure document and without an underwriter. Notwithstanding the costs involved in preparing and distributing disclosure documentation, I don't believe there is sufficient time remaining to facilitate the process because there is insufficient cash available to operate the business to conclude the process, i.e. from issue of documents until receipt of funds.
Section 708 of the Corporations Act defines the types of offers that do not require disclosure. Subsection (13) in particular describes the exemption that is presently applicable to normal retail shareholders. I don't think the company will qualify for this exemption.

I put forward my thoughts about funding requirements for the current quarter in this post. Using my assumptions in that post as as a basis, particularly there being AUD5.8m available funds remaining to operate the business as at EOQ2, a worst case view could see an Administrator appointed as early as the end of this week or early next week. Here's why I see this as a worst case possibility:

• As noted in my earlier post, the AR states typical creditor payment terms are 30 days. Assume these fall due at EOM, i.e. 28/2.
• I don't know the timing of employee remittances, but assume they are EOM as well, i.e. 28/2.
• Assume cash outflow month to month is linear, so roughly AUD2m/mth, meaning AUD1.8m cash available to operate the business after the end of this month.
• Assume there is no funding source ready to be executed by the end of this week.

The 3rd and 4th points in particular will oblige Directors to appoint an Administrator because it will be clear to them that the company will not be able to meet its obligations come end of March, i.e. AUD1.8m available and just over AUD2m required.

Sophisticated investors, instos, MBO, TO, and debt remain alternative sources of funding and could avert this worst case scenario.

Relevant sections of Section 708 applicable to these parties are:

• Subsections (8), (9) and its sub-parts, and (10) are applicable to sophisticated investors.
• Subsection (11) is applicable to professional investors.
• Subsection (12) is applicable to related entities, e.g. an MBO.
• Subsection (17) is applicable to VA.
• Subsection (18) is applicable to a TO.

Listing rule 7.1 also applies.