Share Capital - Dilution

Moelis and Euroz broker reports seem to model shares on issue of 1076m and 1151m ("fully diluted") respectively.
Annual report Y/e Dec 2017 shows shares on issue 1075m + unlisted options 236m.

Milestone 1 shares (171m) issued recently to Vendors upon "cumulative revenue of $20m. These revenues included sales of camera systems to EV for no profit (under the first order in July last year delivers by end Jan 2018)!
Milestone 2 shares (214m) therefore should definitely be issued when "revenues" are recognised from the second order to bring cumulative revenues over $36m (made Jan 2018...initial deliveries due Q2 2018....and if similar timetable to the first order...final deliveries due circa July 2018. So by July 2018 expect shares on issue to be 1460m + 236m options.

Cash is probably getting tight with expanding sales force and Australia capture program ramping up. I note the Moelis report factors in a $10m capital raising before July 2018. The resolutions for the upcoming AGM include power to issue 10% new shares on top of the additional 15% permitted under listing rule 7.1...so 25% new shares could be able to be issued. Based on shares on issue of 835m at Dec 2016 SFI could issue another 417m shares at up to a 25% discount. Assuming a share price VWAP of $0.045 this would raise between $14m and $18.7m cash.

So around July 2018 the shares on issue could easily be ...wait for it between 1460m with no capital raising to 1877m ...or 65% more than that shown in the Euroz broker report (of 1152) or the Moelis report of 1075m.....mmmm something to think about.....oh...almost forgot the 236m options on issue (3/4 of which have an exercise price of $0.10 or less).

Have I missed something. ps I like the company and story...but dilution is something they don't seem too concerned about...handing out options like they cost nothing. I suggest this is why the price has been tanking.

Suggest management needs to give some visibility to investors of revenues likely under EV agreement....before asking for approval to dilute existing shareholders even more! PS I note both brokers have identical assumptions regarding EV royalties and revenue share...but SFI management have not seen fit to share these with the market...maybe they just share over a cosy lunch with a broker who is pitching for a mandate to do a share placement

your thoughts welcome