Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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It does say at the end of the AGM notification about the directors stating they believe the points to be voted on are in the best interests of shareholders. Maybe they could expand on the reasoning and if so maybe we could all understand the boards logic too - possibly with a clear explanation we could all think the same too — but with just vague statements it’s not easy to interpret the exact meanings!
I could be wrong (perhaps if there's some sort of discount) but diluting the company by 33% and increasing the bank balance with the proceeds should (more or less) cancel out for us shouldn't it? So we would theoretically have less valuable shares but own more 'cash in the bank'. And the company would have more cash to invest?
We should end up with a smaller stake in a more successful company. If they aver do it, which they say they probably won't... (I bet they do, sooner or later.)
The problem would be if the added investment in marketing or product development (hopefully not bonuses and salary increases unless fully justified) did not generate any profit but more losses follow instead, so that the cash just depletes again. And even then a smaller stake in a failing company is not much more painful than a bigger stake in a failing company.
As ever it all hinges on getting to profit.
Don’t think selling 1/3 value of the company for 1 million pounds would be a good deal for current shareholders.
Maybe someone could ask at the AGM why the directors are seeking this extra share issue ability at present? They had forecast a 1.6 million spend in their projected 2022 plan and stated they should have 3 million going into 2023 trading year —- and that’s only if they don’t actually begin making money to add onto the current bank balance.
CompoundInterest, this gives them a very good incentive to drive the SP up because if they don’t they will not raise any significant amount.
As posted below, they can raise £916k per 1p:
Selling the 91.6 mil at 1p they receive £916k
Selling them at 10p they receive £9.16 million
Does that mean they are only permitted to issue one-third of the company's share capital (current float (i.e. 274,742,418 shares)) which means at current market cap (4.5m) and share price (1.6p), if raise at current share price then the maximum they can raise is 1.5mil? But usually rights issues are issued at a discounted price so it's likely they may only be able to raise about 1mil? That's not much is it?
I gone through the numbers.
They are asking for authority to issue shares equivalent to £91,580.81 which equates to 91,580,810 shares (0f 0.1p nominal value)
So, this is authority to increase the number of shares by another 91.6 million shares (rounding up) which is 33.33% of current float (i.e. 274,742,418 shares)
They are also asking for authority to sell direct to the market (as per my interpretation, I may have it wrong) shares up to nominal value of £13,737.12 at a time. This equates to 13,737,120 shares.
If all of these shares are sold then it will result to 33.33% dilution - If they are sold.
Selling these at current SP level though will not bring much money in since 91.6 million shares is valued at £916k peer 1p.
So it will only bring in substantial money unless sold at much higher SP - Hopefully an incentive to drive the SP up.
I don't have the details in front of me but recall they said they don't intend to issue them (presumably they might, or what's the point) and the resolution would be renewed annually. I guess it gives them flexibility to reward as and when necessary rather than anything else.
If we trust CC (I do) then I guess she is doing it for the right reasons.
Lots in the media today on shortages of talented people for job roles. Might help explain why eve have been saying what good employers they are of late. I think CC spotted the problem fairly early, early enough to take steps to mitigate.
Definitely initially it was a disappointing set of results from what previously upbeat communications had been coming from EVE. The spend on French advertising during 2021 is highlighting as not producing the expected upturn in French sales at the time!
Thankful the need for very careful spending now has been mentioned and so it seems it is now a slow and steady onward march by EVE.
Yes the mention of shares issues is not what one would have hoped to read but is it so the directors can have the power to award themselves and the EVE staff? ( if so would like target SP set in here such as 5p then 7.5p and 10p bands etc I.e. rewarded for reaching set targets) or is it to provide EVE with the opportunity for a capital raise?
Maybe some shareholders will be in a position to vote on the various points at the AGM?
Sentiment here right now stands at zero, in fact negative and doesn’t look like the AGM tomorrow will reverse this.
Two of the resolutions (main ones) are on issuing shares, I don’t see this as good for shareholders - - Any views on this?