Lightstream Resources Ltd. LSTMF

Conference Call observations

[boarderex86]

I had a few observations about the conference call. 1. Bank syndicate doesn't want LTS using the credit line to pay interest on subordinated debt. This makes it hard to imagine that they will be able to negotiate a new credit line to rectify the issues with the current shortfall. 2. There was nothing stated to imply a change in the prospects for an asset sale. Since this process has been ongoing for quite some time, I don't imagine this is overly likely. 3. Wright spoke most specifically about negotiating with second lien and unsecured note holders. Unfortunately, he mentioned several scenarios which would involve debt holders getting equity as part of the negotiation. This is the least preferred option for shareholders because the market cap is below $40MM right now. It is hard to imagine how equity would be a significant factor in negotiations unless they are offering ~50% as a minimum. On the bright side, I suppose this is effectively the same as cutting book value in half which notionally could still earn shareholders $1/share at some point down the road. Hard pill to swallow for long term shareholders but 5x the current share price is still a very healthy profit for anyone buying now.