Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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Agree on that
Doubleup,
Lots of shares have that, some have an accelerator clause, activates when the share price reaches certain levels.
There's not enough liquidity, at the moment, to expect them to be exercised.
Good Luck All Shareholders.
There's a warrant instrument too which allows them to work on lower values
Also they can demand the repayment of loan if 0.15p
This is the level that is cited but look at how these have worked historically
Prices rallies they unwind the loan into liquidity
CLN has a floor price so can’t be classed as death spiral
Let’s see over this week how you try and ramp this and encourage people to buy. How many times you state it’s such a good price to buy at, haven’t you been saying that since the price was double where it is today??
Doubleup,
All you do is to try and create doubt & spread negativity towards the BOD.
The next sentence doesn't quite fit with your dilution theory, but it's what the CEO says:
"In addition we are currently reviewing a number of opportunities, which could create significant value for shareholders"
The previous CLN & drawdown would have been dealt with in the share consolidation.
Roll up Roll up Great entry Price here.!
Greg do you know how they paid back the 500k from the lombardier drawdown?
They will pay 30k for the facility, the 500k will be paid back by issuing shares diluting the shareholder
Don't forget, they will pay back the £500k drawdown at neutral cost to the company.! :)
Doubleup,
Thanks for your post, but we have covered how the company will pay back all the £500k drawdown and they haven't met the criteria to receive the other £1.5M in the CLN. So there's no real need to spread doubt and make out it's the start of the end.!
Also as you've already pointed out there's another CLN that ADL have from the past, from how many years ago.? , so my question is how long is this death spiral meant to last.?
Looking forward to seeing how this all pans out here.!
Good Luck All Shareholders.!
Death spiral financing is the result of a badly structured convertible financing used to fund primarily small cap companies in the marketplace, causing the company’s stock to fall dramatically, which can lead to the company’s ultimate downfall.
Some small companies rely on selling convertible debt to large private investors (see private investment in public equity) to fund their operations and growth. This convertible debt, often convertible preferred stock or convertible debentures, can be converted to the common stock of the issuing company at a discount to the market value of the common stock at the time of each conversion.
Under a “death spiral” scenario, the holder of the convertible debt might short the issuer’s common stock, causing the stock price to decline, at which time the debt holder converts some of the convertible debt to common shares with which he then covers the debt holder's short position. The debt holder continues to sell short and cover with converted stock, which, along with selling by other shareholders alarmed by the falling price, continually weakens the share price, making the shares unattractive to new investors and possibly severely limiting the company’s ability to obtain new financing if necessary.
The lender would have a potentially greater gain if the shares were to increase in value, but if they decrease in value, there is some protection. Otherwise, they would probably not be willing to lend the money because of the poor risk profiles of the companies interested in this type of financing.
There are some ways to limit the "spiral" situation, e.g. by prohibiting short selling so as to have a stronger incentive for the debt holder to see the stock price increase. It is also worth noting that in a spiral scenario, it becomes more and more difficult for the debt holder to recover its investment because of the increasing volume of common stock it receives upon each conversion of its debt. Another mean to limit the "spiral" risk is to ensure that the amount of funding is in line with the trading activity of the common stock so as to reduce the potential decrease resulting from the sale of common stock by the debt holder.
Companies willing to agree to financing on these terms often could not obtain funding through any other means due to their early development stage or credit risk profile. The terms, though viewed by some as onerous, give the lender a potential way to recover their debt regardless of what happens to the shares of the company, and the company an easy access to dilutive but relatively cheap funding in terms of cash cost.