Take Up Firefinch (FFX) Share Purchase Plan (SPP)

Brad Holland

Brad has over 20 years experience in the Australian and US equities and options markets. Brad specialises in equities and options for capital growth, income generation and capital protection. He also specialises in finding opportunities in small to medium cap stocks. Brad holds RG146 - Securities & Managed Investments and Accredited Derivatives Adviser Level 2 qualifications.

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November 12, 2021

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FFX.AX | High Conviction Report

FFX is undertaking an SPP to raise an additional capital to fund future development with new shares issued at a price of $0.58.

The company intends to target raising up to $25 million (before costs) under the SPP, however the company reserves the right to accept oversubscriptions or to scale back applications in its absolute discretion.

For those of you not familiar with the rules of SPP there is no guarantee that you will receive the dollar amount of shares that you apply for.

As per the company’s statement, they would like to raise a total of $25 million but at their absolute discretion they may take more than this amount or less. If the company was to receive SPP applications for $50 million they would scale back, so everyone receives a percentage of what they applied for.

The main point I am trying to make is you could receive the full amount dollar value of shares you apply for be scaled back to a lesser amount.

We have participated in many SPP over time. What we have discovered is that the bigger the discount the new shares are being issued at when compared to the last traded price the more individual investors apply for shares which results in larger scale backs.

At the close of trading yesterday the FFX share price closed at $0.71. The new shares are being issued at $0.58, a 18% discount to the last traded price.

The closing date for funds to be received by the FFX share registry is not until the 19^{th of} November. We would typically not take up this offer until closer towards the closing date. But to give each high conviction member the most amount of time to participate we are recommending taking this offer up today.

The company will announce the results of the SPP on the 26^{th of} November with trading of new shares issued expected to commence on the 29^th of November.

When the announcement is made about allocations, we are likely to sell down part of the existing position which will then be replaced by the shares issued under the SPP.

TRADE ACTION

Apply for $15,000 in shares in SPP

Stop loss remains in in place at $0.40 for the entire position

Profit target will be lifted to $0.84 of half of the existing position.

This is general advice only. MF & Co Asset Management has not considered your personal financial needs, objectives or current situation. This information is not an offer, solicitation, or a recommendation for any financial product unless expressly stated. You should seek professional investment advice before making any investment decision.