Member Info for Moleinahole

Ivy no first as you know I'm pretty suspicious of kickmuck. Many here think they are someone who knows the inside track. I'm not so sure of that.

The 5m seller remains a mystery. It could be some larger holders aware of the risk outrider pose. Could even be a presold placing for $2m to pay the interest!

Could it be suspended? Well that would not be good for anyone apart from outrider. Not impossible but that would only happen if the injunction was lifted. I think that is what the prophets of gloom have been anticipating. Suspension might make an equity remedy to the problem more complex and close even more funding options.

The key development I think was signing the term sheet. That has to be part of the way out if the injunction remains but they probably would need to remove outrider in full. A key debate in the affadavit is the subsidiary that can take a loan. The term sheet was against the low down FEGL entity but with first call on the security. If outrider blocked that then it's hard to see a judge ruling in their favour specially if they got their loan repaid. Perhaps the is the only way to get rid of Outrider but the medicine isnt sweet and it's high risk.

Star I would not draw any conclusions about YA and how they fit in. They are a higher precedence shareholder than us but are effectively unsecured. They may well have had an inkling that they needed to get their cash out but their attempt failed. If FRR were looking for funding it's really odd that as a last resort the old SEDA could have been used. But maybe it's not available. They could have gone back to primary bid.

The unanswered question to me is why were we paying interest in 2018 in cash not kind. And why leave it to last day to get an injunction! Those two actions are pretty ill advised unless you had a cunning plan. So either our board are as cunning as Edmund or as stupid as Baldrick!

Well I believe I have been consistent when posting about current liabilities, debt, loan notes and outrider.

We learn some key information. In that document.

1. Outrider extracted 3 key concessions in 2016 that were not disclosed in the RNS. First, whilst we knew they had a right to a place on the board it has never been disclosed that they could veto funding they disapproved of due to the requirement for unanimity. Second we knew the notes became secured but this document demonstrates that the notes were secured by effectively a mortgage on the assets and the board were forced to presign undated away control of the company in the event of default. Third we learn that the notes have had 3 amendments since 2016 the last of which in march has resulted in the notes accruing interest to pay in cash not kind.

2. The battle was then set as since march 2018 outrider have been attempting to use the weak cash position and block on the fund raise to force a restructure in their favour.

3. This has finally been brought to a head as Frontera failed to pay the H1 loan interest of $2m.

4. The day that default occured Frontera secured the injunction to prevent the sealed presign letters on the security being activated enabling outrider to be take control.

First the last two sets of published accounts (one audited the second not) does not adequately disclose to me the terms of the loan notes in the notes to the accounts. The last accounts should have included a note to indicate the interest was to be paid in cash and that it was most likely a line in the non broken out current liabilities. That line is broken out and disclosed in the full year accounts but not half year.

We knew H1 has spent more on operations. We knew revenue in H1 was poor. As of today we do not know how revenue in H2 has gone. But we do know as at October 2018 they either did not have or were not willing to pay outrider hence have precipitated the default.

I have no idea why the notes were to be paid in cash in 2018 when the company were clearly short of cash unless it was not at company discretion contrary to the accounts.

So there are only two ways of looking at this. Frontera shackled by Outrider veto have forced him to play his hand. Frontera have been running in 2018 way beyond their means and simply stated to run out of road.

Outrider may never have agreed to any funding package that was non equity. So I'm inclined to believe that Outrider are the main problem as they have now played their hand to takeover the company.

The injunction must stay in place while this is worked through. There certainly looks to be a fiduciary duty case but equally shareholders have been holding here with some key information around the notes known only to a select few. The FCA might like to look at who the 5m seller is in due course.

There is no doubt shareholders are aligned to the board in this titanic battle.

Thanks I am home now and have read the full document.

I have to go out now but will re-read slowly when I get back as it reveals several very important bits of information about the Outrider deal and their conduct over the past few months which I am very surprised were not disclosed in the accounts to June 2018.

For the avoidance of any doubt - Outrider are indeed trying to do what they did at other companies they have been involved in and it is absolutely essential that shareholders support the current board who have pirates on board and attempting to steal the ship over $2m.

Star while I'm away from being able to access the Us court documents may I just say thanks for what you have posted today. There is a lot more in the discovery affadvits than I thought you would find.

The bit I now want to know is why the notes were not simply paid in kind as per 2018. Did Zaza try to withhold their interest accrual and not issue new notes and were they blocking the additional funding for the next phase of field development?

What is the $5m? Was that funding for Niko? Was it new director loans that COULD convert to equity or just secured loans?

If so the court case makes alot more sense. They need to remove Hope to approve the funding and or move things forward quicker else we are trapped generating more debt interest than we earn and never repaying the principal. I am very surprised he has a veto unless it was built in as a result of the loan. The non appointment of further directors this year also starts to make more sense. But I am now very interested in this $5m Star if you can elaborate any further.

Seems there is a lot to research tonight. the profits of Gloom are way off beam on what is going on and have clearly not read what you have been looking at.

Ivy/Star - see my post. The loan notes have never required payment of interest. It has ALWAYS accrued and carried. The other possibility is that the notes to the accounts are incorrect on the loan notes but the notes align with the original announcements.

So if FRR for some almost inexplicable reason chose to pay it in cash rather than kind but didn't pay then they would probably be in default. Did FRR elect to pay in cash but then Outrider blocked the funding? That is the only explanation I could contemplate here.

Its like the YA preference shares it makes no sense to not pay for them when you could just issue some equity. In this case just pay in kind and carry.

Per accounts:
The 2020 Notes are not convertible into ordinary shares of the Company and bear an interest rate of 10 percent if paid in cash or 12 percent if paid in-kind with additional notes at the Company's election. Following the issue of the 2020 Notes, the 2016 Notes were re-assigned to the Company and cancelled. During 2017, the Company elected quarterly interest payments in kind and issued approximately $4.0 million in additional unconvertible notes in accordance with the terms of the 2020 Notes.

So that does not make any sense to me at all! But I had drawn attention to the lack of interest when I reviewed the last set of accounts and wondered if that was part of the accrued liabilities. That would also fit in with the funding last RNS which could have been read as being for short term liabilities.

Yes - obviously FRR is UK AIM listed - so you should be able to trade on the ticker FRR its got nothing to do with US markets unless you have found some sort of derivative to trade. Be careful I know people who have bought the wrong share (no jokes about FRR please!) by miss typng the ticker or market!

You should have no problems buying or selling. FRR is barely a US company it is a Cayman registered, UK listed with its Head office domiciled in Houston. Certainly not to trade the shares.

Toatie - Make sure you have the right ticker on the right market!

Project Frontera Fear appears to be in full flow (to try and close shorts?). Many of us would welcome a wide investigation of the malicious targeting of the company. I think some people need to be careful what they wish for.

Star - I'm looking forward to reading in full tonight. That extra piece of information that they offered funding at worse terms is even more interesting.

So from those legal submissions (which to me carry more weight than Prophet of Gloom misinformation) we have confirmation that the dispute is about debt seniority and terms.

That is a direct contradiction of a lot of the misinformation that has been fed from certain directions who claim we are in a cross default situation. Far from a cross default the greedy so and so's want more of the debt not less! Doesn't sound like a company in financial trouble to me.

Star - what you posted earlier on the security is that explicitly stated in one of the PACER discovery documents - can't access it at the moment via the link.

If the reason for the dispute has more detail in those documents that is publicly available and more importantly directly contradicts the prophets of gloom spin of proceedings then can you post the full section.

What you are saying aligns with my own view of what has been happening but this would be a referable source.

That is impossible to measure and hence at this stage I take a neutral view. We simply don't know enough information on the strengths of each sides cases or indeed Cayman case law and judicial process or the appetite of each side for a scrap!

Defendants will always try to delay proceedings even if they stand to run up more costs. From an Outrider perspective if they look at risk of losing then you would think they would look to settle away from the glare of publicity out of court. Frontera by arranging the alternative finance package last week played one of their very strong cards in the game. At worst Frontera could let this run having refinanced the notes and possibly adding the costs for those on the damages claim!

With the notes gone then Hope would have no reason to be on the board and Outrider would be left defending the current case while Frontera move on anyway. Frontera have shown great patience in running long multi year legal cases.

The key result Frontera need is to ensure the injunction on the security remains firmly in place. That was due to be heard in early December - so I would say that date has passed and the injunction remains. I'm still not 100% sure what the security injunction is against. If its the loan notes themselves then we don't want Outrider selling the notes to someone else (as while they are here they are an asset we can quickly use to settle any damages). If the security is a parent company guarantee to secure the loan or an actual identified asset then once the injunction is confirmed then I think Frontera can move on and leave Outrider sweating on the ultimate outcome.

The outcome that would be less clear would be if the injunction was lifted but the case continued.

Either way as with YA (that the prophets of gloom thought FRR could never clear the preference shares and execute a development program) Outrider will effectively either get moved down the creditor queue if they stay (with or without us gaining damages) get removed as the notes are replaced. Its all part of the house keeping ready for 2019.

Zaza will have had this funding in his back pocket with the MOU's for a while which is probably why he looks more relaxed in spite of the seeming chaos caused by YA and Outrider since August. Since the summer Frontera have finally has some of the friends we have always thought they had in the background given the profile this small company has in high political circles starting to come forward. One with a MOU and the other with a funding package.

Yesterday was part of a process. I would not expect to get blow by blow accounts of the court action by RNS. We only knew what was happening in 2016 on the previous scuffle with Outrider by reading the papers and court dates from the US PACER system. The detailed outcome was never even in an RNS - we only really know it by reading the papers! We don't seem to have such an accessible court system in Grand Cayman!

They may well choose to issue an RNS depending on whether there is anything significant to report. If it was material bad news it would have been in a 7am RNS. So I think we can pretty safely discount any wild speculation.

Actually I think not. I would say that is aimed more at the government and potential partners showing Frontera operate a clean operation for a JV.

Despite what the charge sheet says I tend to reserve judgement as I think the is in the main a commercial dispute rather than anything more sinister! The key for shareholders is that the board have the most to lose so will go into bat intending to do best for all shareholders.

No in 2016 we went to court several times while they progressed the cases and then settled by mediation.

I think the difference this time is that Frontera need outrider moved down the debt seniority to let new investment in. Plan a was that they are moved down quietly, plan b is they are forced down, plan c is that they are replaced with the new finance.

The issue could be as simple as the board place might have been a condition of the Outrider agreement in 2016. Hence with him not on the board what happens to the loan notes.

With the deals going on I think the company know what they are doing here but I would prefer an agreed settlement if one could be reached today. If it has to be a fight then so be it.

Dave indeed I'm not so sure they are just sells - I think its something a bit more complicated and I do think what YA did in august through September and possibly into October is the type of unusual event you don't see often in a share that you start to wonder how it has been unwound. With derivatives as well as real shares you see being traded who knows what could actually be going on in the background. YA not only sold the shares they also made excess profits on them.

Who is selling? Well quite a few people who bought in the September spike and since have indeed been selling. Todays 5m sell although under the bid was not the full point off we have been seeing. So doesn't look same to me. The following sells were pretty much at same price.

Tomorrow also happens to be 2 months since YA settled and withdrew the conversion notices for August and Sept that we know they had already pre-sold into the market.

Those shares were sold via a broker but never issued. YA remain my most likely candidate for those trades if they have been allowed a bit of time (like 2 months) to repay shares they have had to borrow to balance the books.

That's the sort of thing I see these trades being. Still don't think they are pulling the price down the lack of volume is the main issue as it is allowing the MM to open the spreads.

Puddy - we have not seen a sell today characterised by the under the bid nature of the 5m multiple seller. If you read what I said its entirely compatible - today we have seen other transactions moving the price at Bid - those are people trading in thin volume.

Given the attempt at the weekend to organise a short against the company is anyone surprised? A few have joined the call by selling a tiny amount in 1m trades - that is likely some of the people who post here moving money to Block! In low volume that is enough to push the price down unfortunately as the counter veiling volume will wait for news in the main on tomorrows events.

I have several shares this morning knocked down on virtually zero volume so its not just an FRR thing.

Yes sometimes the predictive text speaks the truth......clown notes sounds about right to me I'll call them that from now on....