dark, let's turn on a light... so let's jump to the spread sheet.
If EBI needs $10M, this is what it looks like if ERF holds on to 25%, 50% or 75% of the company.
--------------EBI's MC-------- value/share added to ERFW
25% -------- $13.3M -------- $0.006
50% -------- $20.0M -------- $0.019
75% -------- $40.0M -------- $0.057
If EBI needs $20M, this is what it looks like if ERF holds on to
25%, 50% or 75% of the company.
--------------EBI's MC -------- value/share added to ERFW
25% -------- $26.6M -------- $0.013
50% -------- $40.0M -------- $0.038
75% -------- $80.0M -------- $0.114
Now the big question is how much do they need to raise and how much of EBI do they need to part with to raise that much?
Here is my stab in the dark, 50% can be sold for $20M... that adds 3.8 to ERF's PPS (something has to be subtracted for giving up a portion of EBI)... net could be 3 cents.
While we are talking numbers, what is ERF's carry forward loss? Somewhere over $45M ... that has a value too. If ERF holds on to 80% of EBI, then EBI can use ERF's carry forward losses right? That would set EBI up for paying no taxes while they ramp up... any accountants want to confirm this use of a write off?
If ERF raises $20M and holds on to 80%, the PPS jumps 15 cents.... 8 cents per share is what their loss is worth. I doubt they can sell 20% for that much money unless there are huge contracts coming.
Last observation, why are the warrants set at $4 and $6? My gut says they will try to kick this thing off at $5/ share to give ERFers a quick hit on their $4 warrant... did anyone else see it this way? It gives them a national listing if the PPS is $5... something to think about.
What is to become of ERF if EBI cuts loose... Nagel continues to run EBI, I suppose... so what does DC do with ERF? Is a SLB payout enough to kick start a campaign in EDU or banks... medical? What does ERF's identity become?
We need the front office to fill in some blanks. Is anyone out there wondering when the new Eagle Ford Network will be complete... a few months ago, didn't they say this summer? The summer started... how about an update?
Looking at the possibilities above, today's PPS and the write-off value...can you say "U N D E R V A L U E D ! " ?
Open for discussion.
A1
There's a snowball in Texas!
