Goforbet quoted the "Stock Loan" link. It looks like this deal would better be described under their "PIPES" link:
Mammoth Corporation can structure an equity line or PIPE transaction to meet the needs of a prospective issuer to specifically complement a company’s situation. Typically, Mammoth provides a firm commitment to purchase an agreed upon dollar amount of an issuer’s shares over a specified period of time. The time frame of this commitment can be as short as desired or as far out as 24 months.
Unlike some, Mammoth Corporation does not pre-sell or short a position. The mechanics of the Equity Line provide a sufficient return versus the risk that Mammoth Corporation accepts. Some who claim to purchase shares at 90% to 100% of prevailing bid prices and some who offer convertible debenture PIPEs rely on riskless transactions of selling stock and sometimes earning profits both through a short position and through the issuance of stock pursuant to bottomless instruments. Asking how an investor is going to profit is key to assessing the merit of a proposed transaction. Deals that appear favorable at first glance, but rely instead on pre-selling or shorting the shares can decimate a company’s market. Mammoth Corporation accepts risk in its transactions and seeks to profit over an extended period of time through controlled selling seeking to diminish the impact of the sales. The terms of Mammoth Corporation’s PIPEs make clear the risk Mammoth Corporation is willing to accept. The issuer decides when and if to sell shares to Mammoth Corporation under the terms of the pipe. The fair discount Mammoth Corporation receives is how Mammoth Corporation earns its profit, not by shorting or pre-selling shares. If the stock price goes down, Mammoth Corporation loses money.
These types of financial vehicles are designed with flexibility and control for the issuer in mind. The issuer can sell to Mammoth as little or as much as needed at points in time of their choosing, subject to reasonable limitations spelled out in the agreement. This type of control an issuer has over his shares is one of the key attributes that set this vehicle apart from more traditional debt or convertible alternatives. Key Points:
Issuer has right to sell to shares to Mammoth (similar to a put option)
Timing and amount of shares at issuer’s discretion, eliminating overhang
Issuer has complete control over stock’s dilution
Issuer not obligated to sell any shares
References Available
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