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Strat Aero placing and open offer - but in best case it is still bust by February!

By Tom Winnifrith | Tuesday 5 December 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Cometh the day cometh the broker who will raise cash for any old shite even if it is bust both before and not long after the exercise, as long as it can hand stock at a huge discount to its mates so they can flip and earn lots of lovely jubbly commission as well. Peterhouse Corporate Finance meet Strat Aero (AERO).

I demonstrated a month ago that net current assets at Strat were MINUS $900,000 HERE - so by now they will be MINUS $1 million or more. And there are also long term liabilities of $769,850 but that is for the future.

So today Strat has said that it is raising £590,000 in a placing and hoping to raise another £500,000 in an open offer at just 0.035p per share. After costs then in a best case scenario that will be c$1.3 million. So net current assets today will be just under $300,000 and that will all be gone by St Valentine's Day. Then there are still the long term liabilities to consider.

So Strat is still 100% fecked. But Peterhouse gets its commission so who cares? Trevor Brown, a long term Peterhouse associate and a man who formerly graced boards such as the dog Advanced Oncotherapy (AVO) and Feedback is ponying up for 58% of the placing funds so will have a 27% stake before the open offer and is joining the board. Good luck pal.

Advanced says that "The net proceeds of the Placing together with any further funds raised from the Open Offer, will be used for working capital, to strengthen the Company's balance sheet and facilitate the following

o Training & Education - continued development of Strat Aero's Training solutions and delivery capabilities;
o Survey & Inspection - facilitate the acquisition and adoption of the latest Unmanned Aerial Systems (UAS) technology; and
o Potential strategic investment in complementary businesses and assets for which several exciting opportunities have been identified"

Bollocks. Double bollocks. The cash will be used to pay off vast liabilities and tyo keep the lights on for another couple of months. And then there will have tyo be yet another fund raise.

The shares are down by 21% on the news to just 0.035p-0.04p making flipping a tad hard. Now doubt the flippers will exit on the next ramptastic RNS. But they must hope it is soon because the countdown to the next bailout placing is already underway and that is going to have to be at a big discount too.

This company is still drowning in liabilities and will never generate a cent of free cashflow. Keep selling.

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