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I doubt we are naked shorted @Bannor - our price has pretty much fallen as expected in line with BCN and EMH's falling share price. Unless it's the tail wagging the dogs - which is a (small) possibility I suppose - more so EMH than BCN though...

Indeed @Bannor. One thing I've realised though which might make you laugh, by issuing those warrants it looks like the £1.6m charge associated with them saved us quite a bit in tax that year! i.e. by issuing them in the first place and recognising their liability the way we did (as a financial fee) this was overall quite beneficial to the company - and certainly so in hindsight as they never got exercised. Crazy eh!? I only realised this now after taking another look at the accounts during the discussions with @Dallas the other day related to the 300m shares... and then again whilst checking it was £1.6m, not £1.5m today. ;-)

This is the best I can find - I'm not sure of the reasoning behind this though...

"Accounting for stock warrants" (April 05, 2018)
https://www.accountingtools.com/articles/accounting-for-stock-warrants.html
===[
Option expiration. If the grantor recognizes an asset or expense based on its issuance of warrants to a grantee, and the grantee does not exercise the warrants, do not reverse the asset or expense.
]===

Probably obvious once explained!

It's that line that made me realise that it's a finance charge on the books, not a real transaction to a third party @Bannor. I, like you, had always assumed it was a real cost given to a third party, but I see now that is not the case.

I'm not sure I can explain it to you though. But here goes! Essentially at the time of issue the warrants had a certain value associated with them, calculated using the Black-Scholes model, I believe this was £1.6m. Therefore we had essentially given £1.6m of value to third parties, as sweeteners for taking the CLN, and this needed to be accounted for on the books - as a financing charge. What I'm having trouble determining though is what happens to this charge (in terms of the accounting) when they expire. @Degsie! ;-)

@tomcat - that's not the usual definition of a naked short...

https://en.wikipedia.org/wiki/Naked_short_selling
===[
Naked short selling, or naked shorting, is the practice of short-selling a tradable asset of any kind without first borrowing the security or ensuring that the security can be borrowed, as is conventionally done in a short sale. When the seller does not obtain the shares within the required time frame, the result is known as a "failure to deliver". The transaction generally remains open until the shares are acquired by the seller, or the seller's broker settles the trade.
]===

I agree @Bannor. I don't believe we are talking about Naked shorting despite the title. Just conventional shorting. Of course there may be an element of naked shorting going on, but just likely not to the degree of conventional shorting.

@Bannor It was all sorted by 30th Sep:

http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=1943652

The charge is an accounting charge of £1.6m - i.e. we didn't actually pay anyone this... I'm currently investigating how this is handled on the books when the warrants expire. @Degsie! ;-)

You know I'm just thrashing around ideas. It's equally likely that all the notes and warrants were created on 9th August with an expiry date of 2 years from then.

It's not explicit in the annual accounts that it's 2 years from 09aug16 - this could just represent the first date some of the CLN was issued, in fact it (mistakenly I hope!) says "These warrants can be exercised up to three years after the date first exercisable.". One thing I hope we can agree on though, come October it's a moot point! It better be...

I'm following your reasoning by the way @tomcat. I wouldn't be surprised at all if some of the "cornerstone" investors shorted the stock for not only hedging purposes, but as you suggest to bring down the price as they will be the ones who will stand to benefit the most from a lower share price should they get to join in an equity raise. This is because even if all shareholders were invited to join in on equal terms, it's unlikely the smaller ones could fully stump up their share. "cornerstone" investors win.

And people wonder why Elon want's to take Tesla private...

Ob.

@tomcat If the question of whether the warrants have expired or not matters to you, I don't think it would be insider information for @Kiran to tell you personally, as it's likely very obvious to those who know about such things! i.e. @Kiran would expect the market to already know.

As I said, I would have thought there is a possibility that the warrants were issued to the holders of the notes at the time the notes were issued to each institution, which was a period between early August and end of September 2 years ago, according to the various RNS's issued in that period.

In fact the more I think about it, the more likely I think it is...

But it doesn't matter does it? Or does it!? ;-)

@tomcat - for info following your reasoning they could currently hold a net short position of up to 0.4999%:

"Notification and disclosure of net short positions" (Last updated: 13/06/2018)
https://www.fca.org.uk/markets/short-selling/notification-and-disclosure-net-short-positions
===[
Public share notifications
A public share notification must be made when the net short positions of shares reach 0.5% of the issued share capital of the company concerned, and again at each 0.1% increment after that.

This relates to both increases and decreases of the position (including each time the position drops from 0.5% or above to below 0.5%).

To make a notification, fill in a share notification form (XLS) and email it to publicdisclosuressr@fca.org.uk. We will make this information available on our website. You will not need a submission reference number.

If you have previously disclosed a position publicly and that position then falls below 0.5%, you must make the new position public. To comply with this obligation, email the completed share notification form to publicdisclosuressr@fca.org.uk only.
]===

The two years might be from the issue date @tomcat.

Here you go @Barksy! Now breath ;-)

"Could Elon Musk’s Boring Company address mining as well as tunnelling?" (21st June 2018)
https://im-mining.com/2018/06/21/elon-musks-boring-company-address-mining-well-tunnelling/
===[
Of course the established TBM [Tunnel Boring Machine] experts like Herrenknecht and Robbins along with key players among the mining machinery OEMs have the right to be dismissive of Musk’s grandiose plans with all their vast experience gained all over the world over many years, overcoming countless hurdles in rock type, obstacles and seismicity risk. Having said that, Musk’s other companies have achieved heights no-one ever thought possible; and it is because of this he has been entrusted already with some major works. So just don’t be surprised if one day soon The Boring Company also becomes The Mining Company.
]===

Wait! What? The boring company could double up as a precursor to new mining technology! Hold that thought... ;-)

We all know what he *should* have done, unfortunately he's proven he's only human in recent times, and if he's not, he's clever, far too clever! I don't suppose he fancies the role as KDNC overlord? Shake up the mining industry as he's done and doing to others... ;-)

Great read @Barksy. I'm a big fan of Elon - but I do fear they may get him on a technicality! e.g. If it turns out that he has verbal confirmation of "funding secured" from backers, this may be insufficient in the eyes of the law who might demand a signed and sealed deal for that unqualified statement...

There is a lot of money at stake!

I told you, you were funny @Bannor! Stop looking at the internet when you should be in the garden enjoying yourself! You know the CLN warrants likely expired this week right? If you reply before 6pm - shame on you and your internet addiction ;-)

Might be some synergy with the Inspirit Charger and Mixergy's proposition - smart hot water storage.

"Mixergy Hot Water Tank | Fully Charged" (7 Aug 2018)
https://www.youtube.com/watch?v=z1Z4JCoPAGc

https://mixergy.co.uk/

Although with our KWe to KWt ratios we are likely to be more suited coupled with a battery. i.e. we are heat led rather than electricity led. But I could be wrong, especially in future winter months were it's possible electricity prices peaking early evening means we can generate cheaper electricity from the gas and store the heat smartly for use overnight and in the morning - i.e. electricity led in that instance.

I can see you feel quite strongly about resolution 4 & 5 @Bannor. In principle I agree that it is appropriate that shareholders in a company be consulted and given the opportunity to participate in fund raising. This is why this is the default situation for companies! However, it is practical that younger companies, and those which don't have income, that once a year their shareholders authorise their BoD to be able to raise funds without first coming to the shareholders - which results an additional expense. From memory I think @Kiran said a couple of £100k to coordinate?

In our case, it's not as if we don't know why we might need to raise funds if this is deemed a better option than debt or selling assets: it will be to fund San Luis and Zulu and potentially related to the CLN's - and overheads... Perhaps @Kiran will put forward a better case than I have on Friday for why it's in the company's interest for us to vote through resolution 4.

As for resolution 5? My head's spinning thinking about how that might play out for us if shareholders had the *guaranteed* opportunity to partake in fund raising! So many possibilities eh @tomcat!? Of course one possibility is to vote it through, but on a BoD verbal promise that existing shareholders are able to partially join in on fundraising, ala what BCN had proposed - or some other "reward" mechanism? If it plays out OK, maybe existing shareholders will be offered a larger proportion next time? But AIM is AIM and it just doesn't feel right at this time at this place...

So I say vote through 4 & 5 and leave it to the BoD to raise any necessary funds how they see fit - it's what we pay them to do! However, I'd feel much happier if they took a conference call with @Dallas and @tomcat first to explain how AIM works in practice - not in theory...

And finally, if sufficient numbers of shareholders don't like what they see then we can always oust them... I said sufficient @Bannor! ;-) It's been a hard few years, and not just for us if you look around the Lithium space, but perhaps in hindsight it will transpire that now really was the perfect time to invest...? ;-)

Ob.