After reading the concerns below from lse site .
Still went for a gamble which lifted @ 5.5p ( 50% deal ) Which was daft in hindsight as buys @ 4.8p around 2pm .
Posts of mine below of interest to me Feb 2017.
( 11th Feb 2017 ) Its the one “Edik’s” Army guy was in .
( 19th Feb 2017 below ) i posted …Has anyone any detail / views on proactive investor.
They have commented on this share many times recently are they rampers ?
RNS 7am Chairman & C.E.O…Robert Price resigned today.
( lse bb furious with him claims hes a crook ?? )
A later statement from company midday informing giving up mining business , to concentrate on cannabis one !! ( Zoetic )
Apparently the outgoing chairman might buy the mining business .
Below was put up on blog site after recent placing. 19th August @ 6.9p .
Having written a piece just three weeks ago about Highlands Natural Resources (HNR) and the likelihood of it needing more cash very soon, todays news of a placing didn’t really come as much of a surprise to me.
Although I had wondered if it would manage to obtain funding from elsewhere, especially in light of the fact that the AGM statement mentions that it has an undrawn banking facility of $500,000.
I do often wonder if some of these placings are done to keep larger private investors happy and give them a chance to flip the placing stock though, given that the placing was for just £354,000 – via the issue of 5.13 million shares at 6.9p – and was placed with ‘a group of high net worth individuals’, via Optiva Securities. I’d be very interested to know if this group approached the company and offered funds (as opposed to being offered the placing), and whether any of them held short positions prior to doing so!
What seems even more strange is that none of the 5p warrants that are currently outstanding and expire in March 2020 were exercised whilst they were in the money, as that would easily have provided the funds that the company needs.
Of these 5p warrants, 27.8 million are in the hands of undisclosed parties, along with CEO Robert Price holding 23.75 million of them, so he could easily have added to his existing holding of 12 million shares, which equated to 8.42% prior to the latest dilution.
On a more positive note, the company does seem to be attempting to reduce costs, having put into place measures to save $65,000 per month, including the disposal of some mineral leases, including all of its Utah project. That still means though that based on previous financial statement, it would be burning through close to £400,000 per month.
Taking that into consideration it seems even more strange that it would have raised just £354,000, as that doesn’t even cover a months operational costs, and it states that the funds will be used to ‘accelerate the marketing and development of Zoetic’s products in both the US and UK’.
This all seems very strange to me, as if the company was close to becoming cash flow positive from its Zoetics CBD products, and only needed this amount of money to bridge the gap, then why didn’t it drawn down from its $500,000 bank facility rather than opting for a dilutive placing? It makes very little sense to me, and if anything reinforces my view that it may have been pushed into doing this placing.
The AGM today saw a resolution voted through allowing the board to allot up to 142 million shares over the next 15 months, or the equivalent of 100% of the existing share capital.
At the end of my last piece I concluded that the company should be avoided at a share price of 7.5p as a discounted placing was on the way.
Given the way that the fundraising has been carried out though, and questions over how long it will be before it needs further funds, I wouldn’t be rushing to invest and the market seems to have taken a negative view on today’s news as the share price is currently 6.3p on the ask.