Lionheart's opening gambit should be taken as a statement rather...

Lionheart's opening gambit should be taken as a statement rather than a question. There is no answer to it, but let's use that gambit to discuss what we do know.

All along, since the ABDM days and the signing of a deal with P&G, we have known that the technology works. What we have learned since then is that the directors licensed the technology to P & G for chickenfeed. Perhaps that is understandable because no-one else had taken it on and they were keen to get the imprimatur of P&G for the technology.

But chickenfeed it was. The only ray of sunshine in the deal with P&G is that P&G has grabbed the technology and the public have embraced it. What is now going for us is that it will be quite difficult for P&G to back away from our magnetic applicators.

Can we convert that to cash?

The answer is that we do not know, because we have no idea what is written in the deal with P&G. We do not know how many years it is going to last, whether the rate paid to OBJ relates to the volume of products sold or whether the rate can be renegotiated after a period of time.

What we do know is that, at this stage, despite many promises that other FMCGs are about to leap into bed with us, not a single one has.

Even the deal with Nitto, which we were led to believe was going to result in Bodyguard being on the market later this year, is now the subject of silence. Why have the directors been so quiet about this. Is Nitto going to release Bodyguard or not?

Which brings us to the latest announcement.

What we were told is that Steve Schapera sees OBJ as a 5 year work in progress with dividends not likely to be paid during that period. His objective is to see that 5 separate 100 million dollar enterprises be developed during that period, all under the OBJ umbrella.

Can it be done? Who knows, but, if OBJ is going to control/share in those five enterprises it is going to cost money.

At present we are earning income at a rate measured in hundreds of thousands per quarter, but in order to fund five enterprises turning over $100 million dollars p.a. in five years time we are going to need to raise a lot of money because it certainly cannot be done out of retained profits.

So "Yes", the shares need to be consolidated and "Yes" we will need to raise capital.

How much capital and what will it do to the share price?

I have no idea how much will be needed and I have no doubt that no-one else knows either.

What it will do to the share price is pretty clear. Unless the directors are up front and central with shareholders a capital raising will be treated sceptically.

The last CR which was placed with Sophisitcated Investors went through at 5.7 c per share. I suspect that quite a few of those people are still shareholders, but they will not participate in another CR at a price anything like that.

At that time the CR was done beneath the market price and no doubt any further CR would also need to be done at a discount. I would be astonished if the next CR was done at any price over 2c, perhaps not even that high.