RE:RE:The VRFB-leasing model and LGO share pricesDrhoho wrote: Big question in my mind is with LGO owning LPV outright at the beginning, how would LGO be financially affected by LPV going public? Puzzle pieces presently missing.
1) LPV is a shell corporation formed under the laws of the Province of British Columbia. It is a corporation without business operations or assets thus no value per say. It costs Largo pretty much nothing to set it up.
“Prior to entering into a definitive agreement in respect of the Proposed Transaction, LPV will complete a private placement for up to USD$500,000 (the "LPV Private Placement"). The proceeds from the LPV Private Placement will be used for LPV expenses incurred to date and for general working capital purposes”. So it would not cost Largo anything.
2) To close the deal CPC/LPV “will complete a fully marketed private placement ("Concurrent Financing") to raise minimum gross proceeds of $5 million and up to $25 million...The proceeds of the Concurrent Financing will be used to fund the business of the Resulting Issuer (the new entity), including general and administrative expenses for the Resulting Issuer, for certain transaction expenses incurred by LPV and for general working capital purposes". Also to close the deal Largo will make a “contribution in kind” which will consist of “exchanging vanadium equivalent products to the Resulting Issuer in exchange for common shares of the Resulting Issuer (the new entity). So no capital expenditure from Largo part.
As I said before the new entity going public = very positive development for LCE and consequently = an important booster for Largo’s sp.