RE:"The Plane! "The Plane! "The Plane!Dear all, excellent posts by forecast today and some others:
I have seen many financing in my career as an audit partner of pubcos. This type of financing is not good and is directly tied to the transaction risk assumed by the lender. The outcome of arbriitration is not certain. As I posted an article a few months ago, in the last 30 years or so when the international board was set up, only about 1/3 of cases have been settled. Many have run for many many years. Even if a case is won, collection is very difficult with lawsuits which must be initiated in any country where currency or goods can be seized. Governments do not just cut a cheque to a company. Colombia has many other lawsuits which are all headed that way. The Company's major shareholders would never have accepted such a deal, and they have just a formality, if the outcome was so certain. They did not want to fund this Company with any more money. They are also accountable to their owners/shareholders.
The covertible debt provision is particularily negative. i have seen many companies with stock shorted so the conversion price yields very dilutive securities. The hedge fund will start with 49.99% ownership when tranche 2 is approved and also have the convertible debt overhang on this stock. Even if tranche two is not approved, there will need to be more money raised, so back to square one. This type of deal would not be entered into unless EOM was truly in a bad situation. The major shareholders have a long term option on collecting their money.
Anyone who is still a shareholder here will get diluted. That is how hedge funds work. This type of financing will aid the risk taker which is the new investor.
Some of the posts today, from you know who, were absolutely ridiculous and defy all logic.
GLTA