Great news.
My gut says this pp was done for two main reasons:
1. Difficult to get a bank loan without cash flow. We didn't have enough cash to complete any one activity that could generate cash flow and still fulfill other commitments. I believe we're going to see an announcement of a topping facility in short order. Even with the amazing exploration possibilities in Iraq, the company needs to demonstrate cash flow to get a loan on favorable terms.
2. Give a 'taste' to some of the folks who are making this deal possible (The company executives are in for 1m - Nice touch.). Would not surprise me to discover some Middle East banker (who down the road provides us with a loan) was also involved in this round of pp...
I don't care for the dilution but it's a fact of life for the industry we're in. My hope is these dollars are directed to the topping facility (10,000bpd capacity will run 2.5m for the generators.... Although that may not be the companies cost)
In the end, until we report our first dollar made by the implementation of our technology and/or production from one of our wells we will continue to bounce around in penny stock territory. I think Wadsworth realizes this so we're about to see a very focused push to finally deliver on a cash generating investment. THEN, we'll see financing of future projects instead of private placements. We should also see a stock price more reflective of the company’s potential.
IMHO
In addition, it would be nice to see the company dump/sell the fly ash technology for a few million bucks. You can drill plenty of shallow wells with that kind of cash (I’ve been told by outside sources it takes between 3 – 7 days to drill a shallow well… if you are able to find a rig to drill).
