You make some good points there SleepEasy, however I would make two points with regard to EGL specifically.

1. Extending CRs to everybody, including retail investors, is a masive cost for smaller companies compared to doing a placement. There is certainly a strong argument that placements favour the big end of town at the expense of the smaller investors, however that's often the reality with smaller companies - i.e. they just can't justify the costs involved in EOs, RIs and SPPs. My POV here is that you have to expect this with smaller companies.
2. I bought EGL at 14.5 cps in RL shortly after they were featured here in our monthy meeting, and at 15 cps here on SM, and they're now 23 cps, so that's not a bad gain in just 2 months. If they had extended the CR to everybody, I probably would not have bought more shares anyway, because I'm already set at the right weighting for a company of this size with the risks that they have (as I view them). The investment thesis is playing out OK so far, but there's still a way to go for them to reach the sort of levels I think they can, and I went in with all of that in mind and I set my weighting (position size) appropriately.

Basically, while this latest update on their PFAS trials is great, it doesn't materially change the investment thesis. It just reinforces the opportunity. It doesn't make the opportunity any bigger or better. The only difference now is that more people are catching on to what we already know regarding that opportunity.

In summary, there is a great deal that goes on that is not entirely fair to all shareholders equally, but in this case I accept the reasons and I'm prepared to live with it. It comes with the territory at the smaller end of town. I don't view this as being dishonesty by EGL's management. It's just the way they need to operate when they're this small and want to grow without spending cash when they don't need to.

Hi Bear77, as you know, I introduced EGL to SM because management had changed. Unfortunately the Executive has not. In Nov '20 they had a SPP at 2.5c. The 2020 EOY results had been poor and they were getting a push back from their investors. The Company decided it needed some new investors so they sold a tranche of shares to Seqoia. Many of the existing investors did not subscribe. The day after the SPP closed they released a positive trading update. Share price went up to 3.9c and Sequioa picked up the share overhang for 2.5c. My problem with the recent share placement is not the placement as such but the dishonesty and deception of releasing a market sensitive announcement the day after the placement had been wrapped up. I think the retail investment community are played for fools and we should call out this behaviour, hence my note to all similar investors.

Some good points @Sleepeasy & Bear77.

It does suck that us small retail shareholders don't always get equal treatment. As Bear77 says, sometimes there are practical considerations, but i'm sure that there are also times when it's just insiders looking after themselves.

It's not a satisfying answer, but the only thing you can really do if you feel that shareholders are not being treated fairly (and that it undermines an otherwise attractive investment case) is to sell your shares.

I commend you @Sleepeasy for contacting the Chairman and expressing your thoughts. Hopefully they'll take it on board.

OK, I can see the pattern you are describing SleepEasy, thanks for clarifying that. I'll look out for similar behaviour from EGL management in the future. For now I'm happy to remain invested in the company due to the upside I see with them, but being able to trust management has always been a big thing with me, so if management are displaying disregard for smaller investors and just looking after their mates, then that does make a difference to me. I'll keep an eye on that, thanks.

I'm with you on this one SleepEasy. The announcement raised several questions to my mind that haven't been well answered, including:

• Was a capital raise required? If the funds were to scale the PFAS opportunity I could understand the rationale but as you point out only $1.1m (23%) is allocated to that. Fees take up 5% with the remainder for working capital and BD. If they were cashflow negative it might sense to coincide a general capital raise with a positive announcement but they're not anymore and they - rightly so - trumpet that. So what gives?
• If additional funds were required was debt considered? I don't like debt either but 5% of the raise immediately went on fees so if you can borrow and pay it off within 12 months you're probably not a lot worse off and haven't done a drive-by on retail holders on the way past.
• If a cap raise was required why not a retail offer? I appreciate there are additional costs but plenty of other companies - even small ones - suck it up and wear the cost for the sake of treating all shareholders fairly.
• If not a retail offer why use the last closing price? Clearly the PFAS announcement was going to have some impact on the SP. As it stands the instos are going to pick up shares at a 26% discount to the current share price.

I'm a relatively recent shareholder and have experienced good appreciation in the share price since I bought in, I don't think that should have any relevance. If they are not doing the right thing it needs to be called out and in my mind this is not the right thing. As a longer term shareholder I appreciate your insights which suggest they're a bit of a recidivist in this regard.

I'm also going to write to them to express my concerns. Individually we may not have much power but if enough others do the same perhaps they'll get the message. I'm also going to be looking out for the substantial shareholder notifications over the next week as it may be instructive as to who ends up on the share register.

Hi @Noddy74,

I have written a critical letter to the Board of EGL in which I have called out their unacceptable issue of 27 million shares immediately before a price sensitive announcement. In this case, these investors must have been briefed that PFAS commercial extraction would be going ahead. Other investors were told that it would depend on the results of the trial and the results had not been released yet. I think it's worth pointing out that this violates S1043A of the Corporations Act 2001. I believe that the right thing to do would be to offer retail shareholders a share purchase entitlement at a discount to the trading price.

It would be useful if you were to write to The Board stating these facts. Let them know that you are part of the Strawman Community. The company secretary is Steven Strubel StephenStrubel@egl.com.au