re: pre-open / raising funds
I questioned Cluff on the need to raise funds and the ramifications of such a move and this was their response :
The statement merely refers to the fact that the aim of taking control of the project is to generate enough profits to cover the general costs of operating the company, rather than using any shareholder-contributed funds for this purpose.
As you rightly point out, if it were the case that a company sought only to raise money to cover these costs from year to year (as has been the case with Cluff in the past), then it would result in a dilution of shareholder equity.
If however, capital raising is to be used to fund a large project which will directly enhance the capitalisation of a company, thereby significantly raising the share price, then there will be no such 'dilution'.
It is a fact of life that public companies are able to sell shares and raise funds for such projects.
The Cluff Board have stated that their aim is to generate cash flows from current operating activities, however there are certainly no guarantee that in seeking to build the company into a larger, more dynamic and more widely respected entity within the wider investment community, that there will be not be any need to ask shareholders to participate in further capital raisings.
.... don't know if this helps investors .. or my own investments really ... what we really need is revenue generation information ... make of it what you will...
CFR Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
