Susglobal Energy Corp (SNRG)

[synaphai]

Raising money is not that simple for struggling OTC companies. When it is raised it's almost always a million here or two million there, often the form of convertible notes as Marc did last year when he issued $5.2 million total in multiple notes.

When notes are involved it tells you what little leverage the company has because notes are the riskiest form of financing. They pay out interest monthly and are usually converted into shares at a discount, allowing noteholders to start selling for a profit, which puts downward pressure on share price. Noteholders can also short the stock at the same time to double dip (maybe that's illegal but I'm sure they do it). That's why the uplisting is so important, it can provide leverage to bring in higher quality capital.

Marc knows all of this. His last company, Silver Dragon Resources, collapsed at least to some degree under the weight of convertible debt and the king of OTC toxic convertible lending himself, John Fife, wound up taking over the company. Fife isn't involved with Susglobal but in the last year Marc has defaulted multiple times on notes sold to other lenders and he's had to renegotiate the deals, giving better and better terms to the defaulted noteholders to keep them at bay and keep the company upright. It can become a vicious cycle.

Marc can still find a way through this but it's not an easy problem to solve.