RE:Sarbanes-Oxley - great reason to avoid USA listingHello Ogopogo007
I clearly understand your concern for capital conservation.
It's too late for that though, i.e. the company management had long since told NGC investors what the overall plan is for the company and most shareholders would have reasonably concluded, as I have pointed out ad nauseam, that massive amounts of capital is required to achieve the various quite lofty goals set forth by NGC management; and that was before this option to purchase NeoGraph Solutions LLC was added to the capital acquisition equation.
To your point about spending money on expansion not complying with U.S. listing requirements and regulation, I will simply suggest that grand expansion of the overall NGC business enterprise is precisely what NGC is going to expend vast sums of acquired capital toward achieving Ogopogo007.
Clearly noone likes to be diluted out of the majortiy of their equity position here with NGC. I certainly don't and am now reviewing my options, which include exiting all of or a great portion of my relatively meager NGC share holdings.
Never the less, the die is cast here with NGC. Should we remain shareholders during the interim, most remaining NGC "minority" shareholders would understand that expressly avoiding massive material dilution of our equity positions is most difficult, if not outright impossible, to avoid going forward.
MaterialsMan made a good point regarding liquidity and exposure.
I will suggest that both are to be attained by way of a NYSE listing, this no matter what the specific ways and costs involved in making that happen.
I'm thinking about 49.5% dilution of existing NGC "minority" shareholders equity is, at minimum, what can be expected to begin with going forward - and that isn't all.
Whether it be by way of convertible debt issuances or otherwise, this is how private equity investors, perhaps in addition to Edgewater Capaital Partners and Sprott Capital Partners LP, would be allowed to enter a massive and material NGC equity position.
Ultimately, such assured dilution triggering centric events are, in part, why the NGC share price has had so much difficulty moving beyond the more recent high of $0.67 and most recently finds it difficult to break beyond $0.57.
Also, that group of warrant holders dumping their NGC shares in order to pay for exercising those $0.45 warrants prior to their expiry and then incessantly selling even the shares received after exercising said warrants . . . Suffice to say that certainly has not helped the NGC share price to break out higher.
Now you toss on top of all this the fact that NGC has elected to secure the option to to initially purchase 50.1% of the voting control and 33.3% of the equity control of NeoGraph Solutions LLC, with the right to purchase 100% control by way of a "capital efficient" transaction or transactions as well, and you have a trifecta of events which all point to a serious and quite material amount of ultimate dilution being placed on the table here with Northern Graphite Corporation.
Clearly, I gambled here with NGC based on more than a couple of potential outcomes, one of which being the possibility that NGC would be undertaking a equity financing at much higher share price (perhaps at a minimum of $1.50 initially, and another potential outcome being that a very large private equity player would want to place a much higher initial per share base case valuation on NGC, doing so by way of taking up a convertible debt offering provided by NGC. Perhaps a convertible debt offering with established conversion share price points extremenly much higher than a mere pittance of CDN$0.35 or even CDN$1.50 and a conversion which could be immediately triggered as a result of the company listing it's equities at both the Toronto Stock Exchange, TSX, and the NYSE.
MaterialsMan mentioned a share consoldidation or, as he put it, "a reverse split".
It is not uncommon for a company like NGC, which has relatively limited means with which to immidiately raise the cheaper form of requisite capital, to undertake a share consolidation and subsequently undertake a massive and material issuance of equity to a interested party or perhaps to various exclusively invited and interested parties (see Edgewater Capital Partners and Sprott Capital Partners LP), doing so by way of a initial public offering or IPO transaction.
Doing so in exchange for clearly required capital ensures to distribute enough NGC:NYSE shares, thus providing moe U.S. equity market liquidity in order to satiate the demand for the company's equities on the U.S. side of the equation and providing the company a imparative senior Canadian exchange and U.S. equities market participants exposure.