Great Lakes Graphite Inc GLKIF

Negative equity

[Luckierjack]

Everyone here seems to ignore the $5 million in negative equity. How does GLK overcome this issue. I am just a dumb accountant. Please let me know. Thanks,

[BueBoy]

Not sure of the exact figure but a good chunk is for loans and debentures from insiders (Ferguson family). You either take the view that they so are confident in investing that we should follow, or they are stupid to do so and stay away. My own thoughts on this change daily.

[Luckierjack]

Hi BueBoy, I hadn't thought about it this way and it is a plausible answer. If they were really confident they would convert the debt. The government taxes payable and the indemnification of flow through subscribers could still be problematic.

[alphatrades]

Being myself a CPA, I think I can answer that question. A negative equity isn't particularly a bad thing for the future (since it is also a representation of a deferred tax asset, that they can use against future positive net income), it is more like a measure of the total deficit the company has accumulated over the years and doesn't reflect any future obligation the company has. It is

[Luckierjack]

It actually doesn’t cover my concerns.  They have $16 million in accumulated deficit which should equate to significant tax savings. Far for than $5 million. My problem is that they $5 million in negative equity which means that they have $5 million more in debts than assets.  Anyone that wants to see this company go forward would need to find that before they can invest for the future

[Luckierjack]

the recent quarterly results were just posted on Friday. The debts now stand at $7.2 million. Add in the equity portion of the convertible debt for another $0.9 million and they are up to $8.1 million in debts against assets of $1.1 million. How do they get past this? LJ

[Floridas2000]

I know you state you are a lowly accountant so you are used to balancing books, etc.  But I don't understand the point you're trying to make.  It's a small cap stock, they acquire debt in order to grow.  $7.2 million is not that much considering they can get a battery customer that will bring revenue of multi-millions. I THINK you are trying to say with the debt they

[iamburt2]

Not much interest for such an important company.  Maybe it will take another four years of misleading projections.

[Floridas2000]

I agree the last four years have been crazy.  GLK has gone different directions, had different management / board members and projections have fallen short.  What keeps me from selling is that there is no-one else.  Even with everything they have done, their competiition has done worse.  Some no longer exist.  I want to keep one, maybe two, graphite plays and they're

[bullmoose1984]

Great response floridas2000 can't believe the negative investors that hit these sites and its all doom and gloom ,I find your opinion to be a positive ,and value your opinion keep up the good work.

[Luckierjack]

I’m not sure how my post was negative as I assume that you are talking about me. I just asked a simple question about how they recover from the huge liability overhang.  Can anyone explain how this gets reversed? For reference purposes, for the most recent quarter, I see no revenue and about a million in overhead.  So to get the company to break even, the company would need to generate

[Floridas2000]

You haven't answered my question though - you are choosing the metrics you want to paint your narrative.  You are completely ignoring EVERYTHING else. Give me the end of the third quarter and Novocarbon will prove you wrong, I won't need to.  The battery market is multi-million and you're concerned about a million in overhead.  I mean the way they are currently doing

[Luckierjack]

Floridas, I wish you the best with your investment. I have no interest in shorting a 5 cent stock.

[Floridas2000]

Then why are you so stubborn?  I mean yes they have debt but that's not the only metric in which to judge a company.  I think you know more than to think that way. Give me a junior graphite in a better situation.  Answer the points I made, especially pertaining to the graphite field.  Respond to me intellectually in that format - that's what i want in a fair

[ElliotFT]

look at their cash and inventory on hands. They have stocked graphite and should start making sales now. I expect inventory to keep rising and sales to raise too. If those keep raising I’ll be fine for the next few quarters.

[iamburt2]

8 hours a day,  40 hours a week, the worlds best saleman and no sales.

[bullmoose1984]

Hey Burt I'm glad they are putting in 8 hours  a day 40 a week if you follow what's been happening it takes many months to qualify for this industry but small minds can't think 8 hours a day 40 hours a week so move on buddy tired of your complaining sell your shares if you have any , be happy you only have one life enjoy it life is a great thing.sayhi to erni for us.

[BueBoy]

I can understand the point Lucierjack is making here and he is right but accountants differ from investors. That is why Floridas summary is bang on. Investors look at potential rather than the present. The current debt position is not great at that is why the stock is at 5c. Investors see this an as opportunity, accountants as a concern. I like everyone am holding on for news. I find it

[ElliotFT]

They can't release any supply agreement news before the special shareholders meeting. This meeting will probably be in September so this is your chance to keep buying until then. 

[BueBoy]

Ferguson posted the following on 14 June. "The change of business that was triggered by the sale of the Lochaber property has hampered our ability to distribute news in as timely a fashion as we would like, due to the increased regulatory oversight which we are currently enjoying. We are working to get updates out as quickly as possible. Thanks for your patience." If "as quickly as

[ElliotFT]

They had to postpone the meeting because the TSX regulators are slow. The initial planning was June. They can’t control if the TSX regulators are overload. If september is the fastest they can, this is not a misleading fact, just you not understanding how difficult this process is.

[BueBoy]

Maybe you are right and it will be September. If so then Ferguson can join me in misunderstanding how long the TSX process takes. He had had since the suspension in February to work on in and posted positive comments in June. The other issue is if it is September we are getting close to the end of the hold period for the 7m shares OGL were gifted.

[Floridas2000]

All these transactions need to be finalized by the TSX.  Not sure OGL will be done by September but you do have a point.  I went through the financials and there are quite a few large one time expenses for Matheson, Consulting fees, penalties, etc.  It was also the quarter with the halt so not sure how much business can be done outside of what was done.  Knowing what the line

[Luckierjack]

Why am I so stubborn?  One of the things that really bugs me is the way they took in flow through funds with little or no expectation of using the funds for prescribed purposes. Anyone who invested in GLK flow through in the past few years will have their deduction denied, their tax return reassessed and interest applied. The company has indemnified them for their losses, but there is very

[BueBoy]

All you say is valid. I am as critical of management as anyone and you highlight just one of many errors made by them. You could argue there has been a huge chunk of good fortune that puts GLK in a much better position now than could have been the case. We all know the shortcomings, it's the future we are holding out for. $8m is a relatively small sum to get to the stage they are at. You are

[Ramore1]

What happens if GLK (Novocarbon Corp) goes bankrupt? The Ferguson family could write off the loss like any other shareholder, but, would they be able to maintain ownership/control of Novocarbon Inc. by nature of their security interests? 

[ElliotFT]

....... No..... Should the company fail to take action to protect itself from dissolution, it will result in the selling of the stock of a subsidiary to raise capital. This scenario is predicated on the subsidiary's stock being an asset on the balance sheet of the parent company. A simple google search and you would have your answer. 

[bullmoose1984]

Wow Ramore 1 how about this one ,stop watching conspiracy shows ,life would be better for all of us ,if that scenario were possible all juniors   Heck all companies would do it . Collusion  fraud comes to mind sorry pal ain't happening but I'm willing to put in an order for your shares if you don't trust them .these guys have done an excellent job in a very short time .p.s

[ElliotFT]

thank you for sharing my tought. Couldnt be more complete than that. Tired of these guys.