Agree with your first point on the founder member’s dilution. They never started with a controlling interest and after 2 years, they are in fact moving further away from a controlling interest. One must assume that a further CR would therefore be ‘a less than desirable’ option or as you put it, a last resort.
A JV could have a similar effect, as shares would need to be issued to the JV partner in exchange for a capital inflow. Such a deal could involve a share swop with the Partner, but that does not change the Founders interest in Nuheara.
Another scenario is for the JV partner to buy a stake on market, but then no capital injection associated with this at the time of them taking equity. Of course, that partner could as a next step introduce funding on a sort of loan acc basis. No different to getting funding from a financial institution, where acces to funding is rewarded with a return agreement.
There are probably many hybrid type arrangements of the above and only Justin and David can decide what is best for the business and of course their personal interest as shareholders.
My gut says they may look to market / sell their Intellectual Property via considered arrangement. In other words a strategic placement. The consensus would appear to be that these are ‘smart’ operators. Therefore, fair to assume that they have a vision of how this will play out and I expect ‘self interest/s’ feature in every decision taken.
The controlled sale of IP introduces capital for the near term. They then have access to share buy backs longer term which of course puts them back on a path towards a controlling interest. A store of personal wealth could also be used to shore their interest.
If only we knew, but plenty of food for thought.
Rokewa
NUH Price at posting:
7.1¢ Sentiment: Hold Disclosure: Held
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