News to sell on

By any reckoning, the news that the company is planning to buy a real company is news to sell on.
A spec company without capital is buying a company for 40% of it's present market capital is a real flag imo. An admission of defeat that it's technology is not disruptive as claimed and in danger of collapsing under the weight of it's promises.
The company it proposes to buy, from what we can optimistically deduce from the scant details given , makes at most 2 million AUD profit. This will still not cover Anteo's present losses
It might not be making any profit, if it is repaying debt.
Anteo were being very elusive on the matter of profit or debt.
The transaction will almost disqualify their eligibility for the R & D Tax rebate although I see that the ceo in the annual report says it should get bigger. Not sure on what grounds he says that.
R &D rebate stops after $20 million turnover a year and although there is a 40% tax offset available, it's for R &D done in Australia, not o/s.
On paper this sounds like a good deal for management but not so good for shareholders.
It keeps the management in a job for quite a few years but will heavily dilute present shareholders.
I am guessing that the company they are buying has debt and the devil will come out in the details of their financing.
All in all, a strong sell. Any one buying now, is just plain silly in my opinion