Well being that you asked.
Here is my take on the company's main problem:
Their Net Assets is around $7M - with only $2M in cash and $600k of that is locked away as a deposit for the JV asset.
And yet, they are trying to raise $10M, more than the worth of the company (as per Annual Report).
If I was a potential Investor - in particular, an SI or an Institution, I want to know why I have to pay more than Airguide principals: they paid $1M and got 200M shares 6 months ago.
I would want the same deal; that is at 0.005, rather than 0.024.
So what is my leverage on the company?
Well, the company signed a "Binding Heads of Agreement" to buy 50%, when it DID NOT have the Money.
This gives me - the potential SI or Institution, tremendous bargaining position as the company is Locked in to buy 50%.
For the company: No funds to buy will likely mean the JV partner will take legal actions to put the company into Administration/Liquidation or seek damages - afterall they have a binding heads of agreement.
This means the company will likely offer a better deal than the 0.024 than that was previously announced.
And it also means as a potential SI or Institutional Investor, I have to be absolutely sure others are chipping in, to ensure that the full $10M is raised, otherwise I will be stuck and my money as a shareholder will likely be gone, if the JV partner take legal actions to put the company into Administration/Liquidation.
That is the Main uncertain factor.
The other factors that is also crucial to this CR: Supplier/s and Buyer/s contracts - success on these will have an impact on the level of uptake in the CR.
Another uncertain factor.
Bottom line: Potential Investors want Certainty, especially from a company trying to raise more than 100% of its Net Assets.
But given the current political situation in the DRC, its almost an impossible task to find potential investors ready to fork out $10M.
Another uncertain factor
IMHO, this is the reason why this has been delayed, delayed and delayed and the reason why 62 Capital walked away from 6% (despite what the company stated - lol...who walks away from the ability to earn 6% of $10M?!?)
AIMHO.
- Forums
- ASX - By Stock
- WFE
- We are in the end game now
We are in the end game now, page-50
-
-
- There are more pages in this discussion • 386 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add WFE (ASX) to my watchlist
Currently unlisted public company.
The Watchlist
RCE
RECCE PHARMACEUTICALS LTD
James Graham / Dr Alan Dunton, MD & CEO / Non-Executive Director
James Graham / Dr Alan Dunton
MD & CEO / Non-Executive Director
SPONSORED BY The Market Online