The prospectus for the IPO contained the following statement:
"Sufficiencyof fundingAs at the date of this Prospectus the Company is not cash flowpositive, meaning the Company is reliant on raising funds frominvestors in order to continue its operations. Upon completionof the Offer the Board anticipates that the Company will havesufficient funds to pursue its activities for a further two (2) years,following which the Company may need to raise additional capitalin order to continue its operations if the Company is not profitableat such time."
Now here we are, five months after listing, with a CR.
IMO,this was a train wreck from the beginning, with a US entity coming to AU to float a loss-making US entity (2106 $9,128,269L, 2017 $8,702,496L,2018 (1/2 yr) $3,447,807L) establishing an enterprise valuation of $16,147,114 ($11,031,082 plus $4,817,863 plus $298,169).
The new entity incurred losses to 31 December 2018 amounting to $1,298,090 pre IPO.
The IPO raised $5,024,004 gross of issue costs at a 20c issue price.
The first quarterly 4C on 31 March 2019 revealed a positive cash flow balance of $1,115,000 including the proceeds of the IPO. Despite the raft of positive announcements since listing, the writing was on the wall as the 4C did not even cover the pre IPO losses.
The main benefit of this non-renouncable CR should be to enable those who subscibed at 20c to average down their entry price should they wish to do so. GLTA.
A 60% drop in market cap in such a short period since the IPO does little to inspire investor confidence in CLB.
DYOR
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