Been stewing on this for a good while and still want some more...

Been stewing on this for a good while and still want some more specifics on the whole deal, but I’ve been pretty happy to see the sellers move off and buyers step in since the announcement.

At this point, here’s my rambling 2c.

Great to see the new Edison valuation @ 70c, but it also reinforces a key point about the p3 funding and the $12m R&D rebate that we’ve known for a while - this is a rolling rebate coming back from $27m of spending over the next few years. It’s a great situation having this pre-approved, but time is money and this money requires time. Circular and slow - Medlab have been proving up some real commercial partnerships for revenue over recent months and should be able to straddle the p3 funding reqs and other expenses as they go, but fully funded right now means no delays.

Having $20m+ cash available now will make a world of difference, and I think securing these funds in the current market is a pretty huge nod to Medlab from the US market. Globally, it’s a tough market and could potentially get tougher looking forward for any company that hasn’t locked down future funding today.

On dilution - actual final dilution is a big question but impossible to answer. @amb005 your math when they announced the EGM was (and remains) spot on as to 4m shares issued. Approval is for “up to” 4m shares to be issuable, which I’m guessing was to give whatever buffer was needed to protect against any ASX SP movements, macro market and even forex changes between that first announcement and the final Nasdaq listing. At the time of the EGM announcement, Medlab had to give examples (ASX requirement for a consolidation proposal) based on the (then current ~5c) SP.

Assuming they have a fixed figure (Silvahman suggested $20m?) on the table from the underwriter, actual shares needed to be issued may much less than the max 4m, but it’s capped at 4m if the price falls below 5c, I’m guessing for those “buffer” reasons.

So, hypothetically and rough figures - if we were looking at AU$20m raised @ 5c (post consolidation = $7.50), that’s 2.67m shares issued, dilution of 46% . If SP is 10c (post con = $15), that falls to 1.34m shares, dilution of 23%. It really all comes down to how many new shares are issued for how much total cash Medlab is offered and accepts, which just alters the dilution vs cash injection/book value = MC = SP equation.

Ultimately, the total cap raise/cash injection component needs to be considered and shouldn't be overlooked – hypothetically if we’re talking $20m new funds from the listing issue, balance sheet goes up by that much. Markey cap can’t stay at ~$20m with (I assume) about AU$6-7m current cash on hand, $3-4m receivable in rebates around September and new revenue due in the next few months, and then a fresh $20m+ cash injection.

So we’re diluted but the SP should rise. I’d consider a 32% dilution if the MC goes up 50% as about breakeven, and worthwhile to get on the Nasdaq with full funding to ensure NanaBis/NanoCBD etc get across the line to commercial sales.A lot is going to come down to how the our market and the US market view this deal and what Medlab can achieve/announce in the interim, but so far it's looking positive.

A lot of unknowns that I don’t think can be known until the listing is much closer to occurring. Currently, I’m tentatively (yes I used that word again ) reassured that the SP action has been positive (up >50%) since the announcement of the dual listing.

Still have some questions and concerns, but currently I’m leaning into this deal. Ask me again tomorrow