gbd, You are right about Mr. Bendall and other directors INTENT to fully subscribe, as opposed to COMMITMENT to fully subscribe.
However, a couple of the press releases this spring had omitted Mr. Bendall's intent/commitment -- which had been in PRs last summer and fall -- and I considered it significant that the intent was restated, so I am giving the benefit of the doubt as opposed to entering into a semantic argument. We all hope it happens!
In a separate post, Huffmajo asks why the debt to equity conversion happened, since the objective of the RO is to raise cash.
Mr. Bendall has not said why he 'purchased' his initial RO shares this way -- although it is a good investment strategy, since the company does not have the funds to repay the debt unless it strikes oil, in which case the stock will be worth far more than $.07.
Since he hasn't said, one can only speculate. My speculation (other ideas?) is that he desired to put up cash, as he knows the company needs it, but the $50M personal LOC he disclosed a year ago was after all not available, at least not for this purpose, or at the moment.
By converting, however, he was able to keep his options open for the second round of the RO, which says that whoever fully subscribed in the first round, can buy as many shares as desired in the second round (over subscription allocated pro-rata, may we have that problem). And the $8M of RO still available, is a lot more than the $1.2M converted. Certainly, we would forgive the initial conversion if the cash happens now.
And, it is important to EEGC that when Mr. Bendall and the directors fullfill their intent, it is done so with cash. This will enable the rig to be bought (although I'd prefer rig rental to preserve cash), and strengthen the company's bargaining position with Sure Capital, as the final terms have yet to be agreed (at least at the time of the 8-K).
