While I agree Pavlovich won't have a controlling interest (more than 50%), for clarity, as I pointed out earlier in this thread, the Agreement document lists two contradicting ways this equity is given and the one on Page 4 is probably likely to be the correct one (the other one is in the notes on Page 7. Below is what I think is the correct one:
![https://hotcopper.com.au/data/attachments/1888/1888879-bacd8d06888c4d8d5c26f3603999c546.jpg](https://hotcopper.com.au/data/attachments/1888/1888879-bacd8d06888c4d8d5c26f3603999c546.jpg)
So, if the share price goes down below 24c, the $35m in shares will be issued at 24c (80% of 30c). So, instead of 116.7m shares issues to Pavlovich, 145.8m shares are issued. So that would mean 36.2% of shares issued.
But, if shares go up, well that is different again. Say shares are issued at an average of 60c, then you can do your own sums. But what the current OBJ holders should be more concerned about is how much their current holding is being diluted. If Pavlovich's equity is issued at an average of $1 (instead of 30c), the current OBJ holders will have 31% of Wellfully. Also there is the question as to what the "subject to performance adjustments" actually means. I am not sure if Pavlovich will be too worried, he will have received $50m in cash regardless and is being issued $35m in equity, regardless of the actual share price, of possibly cash if agreed (and OBJ has that much cash).
While people are talking about Pavlovlich, no one is asking about the Capital Raising. What I wanted to point out that because of the dilution of the Capital Raising, it is the
New Equity from the Capital Raising that will have the most equity in Wellfully and if that goes to one company or connected group of companies, they are the ones that will have control of OBJ. They have 166.7m of shares issued, as opposed to 90.5m of the current OBJ holders. So they have control. Before you go voting on a Capital Raising, you might want to know who it will actually be that will end up with the controlling interest.
With the shares issued after 1, 2 & 3 years, there is the possibility that the New Equity will still have the controlling interest even after all the shares are issued to Pavlovich. Using a bit of maths, if the share price goes up, on average when the new shares are issued to Pavlovich, more than 53% (above 46c) that would mean the New Equity would have over 50% of Wellfully. (I think my maths is correct on this, but you might want to check)
Tthere is nothing in the Agreement as to exactly where the $50m Capital Raising is coming from, only that they have engaged TTB Partners to do this, which is based in Hong Kong). I have said previously that this sort of thing doesn't really get public until they are pretty sure they know what the end result will be. If they have engaged a Hong Kong company to do the capital raising, then there is a fair chance that it will be Chinese money. Things can get a bit "cloudy" when investment money comes out of China.
You might be saying that current OBJ holders will get to join in the Capital Raising. Even if that is the case, the New Equity will far outweigh anything other holders have as they are putting in the vast bulk of the $50m and I very much doubt that current OBJ holders will put in anything more than a couple of million.
Make no mistake, it is not Pavlovich that current OBJ holders should be concerned about, but who is stumping up the $50m to actually control Wellfully (the new OBJ).