The week I saw.
Day 2 brought 2 ASX announcements.
First up was the RI Prospectus.
- TAS won’t be taking their full entitlement. TAS only PRESENTLY INTEND to take up 50% of their entitlement. It is intended that the $1m loan to EDE will be repaid with shares from the RI and they (TAS) intend to apply for a further $600k of their entitlement. The Solomon’s only PRESENTLY INTEND to take up their full entitlement. Not the commitment that I had hoped for from a Board who have commended the RI to shareholders. I also note that the 2 recently appointed board members are yet to disclose any purchased shares in EDE, either on market or off market and aren’t eligible to participate in the RI. It appears they didn’t participate in the recent placement. It is also worth noting that the Placement at 5.4c was undersubscribed.
- Patersons are underwriting the RI. On day 1, 2 and 3 of the week, the EDE share price closed at under 5.4c. This triggered a clause in the underwriting agreement where Patersons are no longer obligated to underwrite the RI because the EDE share price closed below 5.4c on 2 consecutive days, which potentially leaves retail entitlement holders in a vulnerable position where, after taking up their entitlements, they could possibly learn that Patersons haven’t underwritten the RI, thus leaving retail investors in the vulnerable position of EDE not having sufficient funds to continue its business, which has been detailed as a risk in the prospectus. Note that there is no undersubscription.
Second up was the Korean Durability Test Results.
- Of particular note to me, there was no abrasion resistance results and no mention of abrasion resistance results pending. When considering durability, 3 test results are very important. Imv, they are, abrasion resistance, compressive strength and permeability. The compressive strength results with HP achieved a best result of 9.7% increase versus PZ’s 8.9% reduction. Permeability was equally as uncompelling, imho. An increase of 16% and 7.5% respectively. Imho, these test results weren’t compelling and don’t warrant further investigation with shareholder funds. Comparing these key measurements to those achieved in ASTM testing, it would surprise me if Korea progresses to a market opportunity that supports the current EDE valuation, but that’s only my opinion.
- Were the results that KCI (Korea Consultants International) achieved similar? If so, did KCI find the results uncompelling and this is why they didn’t proceed with their MOU with EDE? We will likely never know but it’s worth contemplating, imho.
- I will have more to say about the * article released during the week shortly but I will take something from it and mention it here for context. In the article, KC industry is described as a Conglomerate. By any definition, imho, KC Industry is most certainly not a conglomerate. It is a company who’s business is concrete and who’s share market valuation is A$23m.
Day 3 brought the US Sales and Marketing Update.
- I’ve been reading EDE’s US sales updates for a few years now. As of this latest update, EDE has just completed a placement that wasn’t fully subscribed and is in the middle of a RI (see above). Imv, retail investors are making up the bulk of the year to year funding. To my knowledge, EDE haven’t attracted funding from US industry, EDE hasn’t attracted Korean industry to the register, EDE hasn’t attracted European industry to the register, EDE hasn’t attracted Australian industry to the register. Year after year I read US sales and marketing updates and, imv, year after year I keep reading very similar US sales and marketing updates.
Day 4, the * interview/article arrived.
- Imho, it was an emotive article written by Reuben at *. It’s worth noting that there were very few details presented to support the emotive language. Many have seen Tim Boreham’s promotion of EDE recently. He’s another * contributor.
- So what is driving Stockheads interest in EDE? * is free to read. * encourages company’s to contact them if they have a story to be told. If company A contacts *, does company A pay for an article? The emotive (imho) articles have appeared at a time when funds are being sought predominately from the retail (imho) sector of the investment community.
- super strength, colosall, conglomerate, large, big, tipping point, silly numbers, trillion, very serious, top 5, serious, global, accelerate.——————————————————
Should the language be tempered? Or is the language OK despite it possibly exciting entitlement holders at a time EDE is raising funds and the risks have been outlined in the RI prospectus? Is such language in conflict with the risks outlined in the prospectus? That’s for each individual to decide, imho.
Day 5, EDE closed at the placement and RI offer price of 5.4c.
Its interesting, to me, that Patersons is Perth. EDE is Perth. Also, SAS Resource Fund is Perth. Perth is a small place. Has GS promoted EDE’s funding initiatives over the past few years to Andrew Forrest, Kerry Stokes and other SASR board members? Or any other “influencers” in WA? I would hope that the likes of AF and KS would privately (or otherwise) invest in any company if there was a compelling case to do so. Maybe GS can email them the * article. Or discuss the article with other board members at the next SASR Fund board meeting. I’m not suggesting SASR invest in EDE.
https://www.sasresourcesfund.org.au/about-the-fund/the-board
It’s been an interesting week.
The above are my observations and opinions only. DYOR.
(20min delay)