Member Info for OilNovice

Rose / ihavenoclue - my opinion is that they will take the new financing. They need £600k to pay legacy issues and need £xxxk for acquisition of SocialAlchemist (plus opex). There will not be enough gross profit from a £1m or £3m contract for this... all in my opinion. The new contracts might cover opex but surely won't generate enough profit for the rest?!

I believe the current float is 1,399,000,000 (last week's total prior to RNS) + 238,000,000 (Deed of Settlement share issue) = 1,637,000,000 shares.
Ergo, the MCAP = 1,637,000,000 * 0.00148 = £2.42m

You will have to re-calculate the MCAP after new shares have been converted which won't be for at least 3 months.

crude - I think the latest sp drop will have taken some of the Financing Agreement into account. The sp has dropped from 0.215p to the low last week of 0.12p - a circa 45% drop.

Also, last week's drop almost certainly would have taken into account the Deed of Settlement 238m shares issue (which I believe have already been sold into the market).

So for me, there can only really be good news from here on out... and the sp should react accordingly. And IF EHGOS have sold all the 238m into the market, that would be positive.

The only negative news that could come out is increased legacy costs above and beyond £600k expectation; and if we have to pay the creditors the £400k...

And I don't understand the logic of not signing new contracts until recapitalization... why would that make any difference?? They have stated they are taking £1.375m, why would that effect contract signing?

This is a VERY welcome rise.
I managed to average down to under 0.3p average. It’s all I was willing to invest (lose).

This to me is an all or nothing play now. I’ve been thinking about the situation and my opinion is this will either go up 5000% by 2020 or will go down to 0.005p.

But I am happy to let it play out. Let the cards fall as they may. A journey of a thousand miles begins with a single step. Better to have loved and lost than never to have loved at all, fortune favours the brave...

Okay. Now this is an interesting start.
Already a 15% swing.
Something is definitely brewing here considering we are still consistently more sells than buys.

Any ideas?!

Ifonlyiknew - yes. They will receive the money as a loan note (ie with 5% interest to be laid back within 12 months).
BUT the Warrants to convert those loan notes to shares must be approved at GM and further drawdowns will need a prospectus.

SL - the 238m shares were not gifted. They were the ‘lost value’ from when EHGOS sold their previous tranches below 0.4p (the floor).
So in essence, EHGOS were shortchanged when they converted the previous loan notes below that floor.

Just to clear this up - the Financing Agreement must be approved at GM and then prospectus.

The Deed of Settlement has likely already been executed and does not require approval. That is the 238m shares that have probably been dumped.

And why the flock is the LSE clock three minutes fast??!!

Hey heart - I’ve never shorted. Hate the bastards.
I’m in for several million here, and this is causing a bit of an imbalance in my portfolio.

And yes, if there is no selling into the rise, who knows where this will go. I am still hopeful - and hope the rumours are true!

SL - where do you get your intel?

MrNation - IF there is a Sega contract for £3m, I don’t see the sp going much over 0.3p, more likely mid 0.2p range.

I remember the first £1m RNS - the sp rose about 25% then dropped (due to fund selling).

Ergo, a contract that is 3x the revenue, may get 100% max increase. Not sure.
Although, if the fund has no shares to sell, it could go absolutely mental and create mindfunk of buying!

Skittish - the BoD will surely still take the EHGOS financing. Surely. To them it is free money (until they are invested they have nothing to lose!).

In my mind, having access to £1.375m of ‘free’ money is certainly a good thing for a start up...

Brycen - I agree with you, I believe the market has reacted already. Dare I say it, I actually think the sp will increase with the release of the TR-1s.

Then there is the issue of the Financing Agreement. There will be an RNS to state they have signed it, issued Loan Note and drawn down the first tranche of finance, but if I am reading right, they cannot convert until Warrants are approved and prospectus is released? So that gives us at least 3 months of ZERO dilution news! EXCELLENT :)

If we see some positive RNS in that 3 month period, this could increase significantly. The 'strange' buying suggests there could be something brewing. All my opinion of course.

With a net 'sell' volume reaching nearly 200m shares since the RNS, this suggests that the Deed of Settlement 238m shares are very likely to have been traded and on open market now (or within the next few days).
Expect two TR-1s, first to state EHGOS shareholding increased by 238m shares.
Second to state EHGOS are back down to their 5% lock in holding.

How the market will react is anyone's guess!!!!

MrNation - i agree that high volume is positive.
The average volume over the last few months was around 5% of total shares. This week has seen far larger volumes with a bias to sells.

IF EHGOS are selling, there should be TR-1s next week which will be telling - probably a ‘increased holding’ from Deed of Settlement then followed by a TR-1 back down to their 5% minimum holding.

Skittish - I am certain that the company will take the new financing. 100%. Even if they don’t necessarily need it due to contacts / positive cash flow.

They will only not take finance when they are invested. Which will only happen when they hit a certain low sp or are confident in the company prospects.

This is very, very interesting.
Looks like RNS on way and some people already know it!

Hardy - the collapse in share price is down to dilution. They have introduced 238m new shares and will introduce another c.660m shares within months - that is why the share price has collapsed.
Also, there is negative sentiment with PIs. They are selling as well, compounding the effect.

This will likely go below 0.1p and possible to 0.075p. BUT, any positive news could move the sp hugely. And I don't want to be out when it hits.

Hardy - I have never stated a target, but also wouldn't say that a target is fantasy. Stocks can go up 1000% in a short time with the right momentum and news...

The dilution will be done within n 6 months, as per RNS details. But I believe the impact of the dilution may be before that, and therefore a low hit before that. This is why I believe getting in sub 0.1p would be a great entry point. And I will invest heavily at that point.

I agree Sefton has not been totally true to his word in terms of saying no more financing, but the RNS gives some justification of this, albeit an annoyance.

People should not be angry at Sefton. They should be angry with themsleves (or just hold and wait for the reward). This share has always been a medium term hold, no other way to get reward.

And people need to stop looking at this from a PI perspective. At this stage of the company, the BoD only care about getting the structure right, solving legacy issues, and getting a solid base to start from. They chose to take over WDC rather than start fresh - we can debate that until blue in the face but that was the path they chose.

You can't really look at the fundamentals, as there aren't any yet.
So the only thing you can look at is the business model and the positive vs negative.
- Most negatives are now known and sorted (legacy debt, structuring of new company, challenges to BD and sales...)
- Only unknown negative now is the potential £400k for creditors

- Positives are £1m contract in bag with details to be announced; positive outlook for BD; platform in place from SocialAlchemist purchase; established fanbase from purchase of SocialAlchemist; strong BoD; cash flow positive business (TBC)...

I truly believe once the dilution has flushed through, we will see a serious re-rate and significant rise in sp.