Ann: $2.53m Capital Raising and Loan Facility Restructure, page-79

We're seeing a great example of why dilution is so terrible for shareholders. The share price drops 50% and yet the market cap will remain the same. One thing I would say to new investors is don't look at the share price in terms of a single share. Look at the share price as one piece of a whole. If you're holding shares and dilution occurs you actually own less of the company than you did before and yet the company is worth no more than it was before.

I was careful with this one and only had minimum exposure. This drop has now made my holding unmarketable which is the only reason I still hold.

Let's say the company is making an average of $450k per quarter for an annual total of $1.8m. With the market cap of $8.3m we're sitting on a revenue multiple of approx 4.6 ($1.8m x 4.6 = $8.28m). Sounds like most people bought at around 3c, Which means the company would need to be making $14.8m annually or $3.7m per quarter using the same 4.6 multiple to get a market cap of $68.08m to get a share price of approximately 3c. Here's the scary stuff, revenue would have to increase more than 700% to allow those that bought at 3c to just break even.

Markets aren't black and white though so if revenue was growing rapidly then all those calculations are meaningless and a potentially higher multiple would be used. This is not advice but rather some rough calcs I ran this afternoon. I feel for anyone that lost big money on this one. GLTAH.