Koil Energy Solutions Inc. (KLNG)

[littlefish]

chev, the financing I am guessing would be a combo of dilution and borrowings (debt).

I also saw the bonus shares did not have restrictions as to when they can be sold:

http://www.sec.gov/Archives/edgar/data/1110607/000101968708001962/deep_ex0401.htm

Let's just say Prospect Capital goes ahead and converts 2 million of the warrants (no idea if they have or not). That would raise anohter $1 mill. So that would be about $7 mill raised and another $16 mill needed for the acquisition.

Brikk mentioned he did not think there would be bonus shares attached so I am guessing maybe someone from IR or the company mentioned that to him (just guessing). If that is the case, we might try guessing at maybe a 70% debt to 30% equity financing deal... But thta could be way off either way.

If that happened, about $4.5 mill in shares would be issued under that scenario. Considering the last financing was done at 15.5%, and the bonus shares at about $0.51 then I would guess maybe the $4.5 mill gets done around that 50 cent mark or so. That would equate to about 9 million shares at 50 cents but again just trying to show a potential deal so people can get a feel (personally I don't think the terms will be as favorable as the Mako financing if the deal goes through but we'll see).
That would also add another $11 mill approx to debt and possibly at similar terms (interest rate). That would put a lot of weight on current shareholders IMO if this happened but there's already lots of weight IMO so if you can take the load already, you may not flinch at more debt and more dilution (I would but that's just me).

One, the interest expense per Q would be about $0.9+ mill per Q expense I think (with about $24 mill debt at 15.5% interest, $13 mill from current debt and another $11 mill added for the acquisition).

Two, there would be an extra 9 mill shares (almost 10% dilution but at about 50 cents per share so cumulative dilution if exercised would be about 5% dilution considering current share price).

So in that scenario, you would have 5% dilution (not terrible) and almost $1 mill per Q interest expense.

I did glance at the Mako #s posted to Edgar on March 20 and didn't like the comp from the prior Q but have NO idea how they fluctuate seasonally, etc. The thing that bugged me the most was ARs going up while revs dropped significantly. I owuld need to see another Q rpeort thou to see if that was a problem or maybe just a blip. ARs and revs can fluctuate but when revs outpace ARs for more than 2 Qs I sell. Just me though.

There are alls Sorts of little tricks that both sides can do. PCC might try to sell/convert a few shares/warrants to hit the price a bit and get better terms for them. But since they already have a sizeable loan and shares of the company I doubt they would do it aggressively if at all. Insiders might try buying a little to get some attention to try and lift the price a bit and allow for better leverage, etc... But we're not close to how the deal goes so who knows. Anyhting could happen. Another party could be tapped for the financing. It doesn't have to be PCC and it would make sense for the company to try to seek out more than one lender so they can shop around and play difft lenders against each other to try to work a better deal.
At this point it aint worth worrying too much about all that except that it will likely mean more dilution for current shareholders. And more debt for the company.