Lithium Exploration Group Inc. (fka LEXG)

[alexbh2285]

That's because for the reasons that follow I believe there is a high probability the warrant deal is bad for LEXG and possibly even more dilutive than the old down 50% strike without the warrants.

1) The convertible investors are pure arbitrageurs and not "investors" who are making bets on the future of the business (they win whether LEXG stock goes up or way down thanks to the death spiral feature of the convertibles and they don't need the stock to go up 300% in order to profit from the warrants - they can delta hedge the warrants in an almost risk free fashion). This type of investor would not give away value, especially when the other debt holders are not doing it.

2) I can't think of any other reason why Alex Walsh would not immediately file an 8-K with the number of warrants and their expiration dates or just PR it instead of only publishing the "good" part of the convertible renegotiation. Alex Walsh PRs everything good so by default I assume those critical details that have been left out of the initial PR and today's "update" are bad.

If LEXG released these details we could see the value he gave to the convertible holders in warrants compared to the value they gave up by converting at $.00045 rather than $.0003 (still an awful death spiral). We could also then roughly calculate the additional stock pressure /shares to be sold short at the current stock price - even though the warrants are struck at 300% and 400% premiums, they still will lead to a high delta of the warrants to be hedged even at current prices and thus high selling (and subsequent selling and buying as the stock moves up and down) due to the extremely high volatility of LEXG. We should get those details when the 10-K is filed in mid-October. The "bad" details have been traditionally saved for the SEC filings while anything remotely "good" has been immediately, and often prematurely PR'd (like the supposedly near final $14MM investment in WhiteTop that became $5MM shortly thereafter).