ERHC never saw $30 million from that deal, more like $2 million plus reimbursed expenses and that money is long gone. Plus now they owe CEPSA for the part of that 1 well deal that was not carried, and they owe the IRS $2 million. Together they owe much more than the entire market cap of the company. They have already started issuing new toxic debt, something some swore would never happen because "they learned their lesson", $95,000 worth as of March 31st, who knows how much more by now.
So shareholders have no idea how badly they will be hurt by dilution going forward, no word from ERHC how they will pay the money it owes, and no cash to pay its share of any future exploration costs. Maybe they can do another deal with CEPSA but in their much weaker position from where they were when the first deal was done, what might that deal look like? Give up more than half of what they have left for another 1 well partial carry and some cash they will dole out to themselves in salaries as they use toxic debt to pay their other liabilities already incurred and dilute the post-split shares into worthlessness perhaps?
The fear gap was based on legitimate fears which have been proven to be justifiable and it will never be filled.
Bankruptcy? Maybe, maybe not. At least not while they have almost 3 billion more shares to issue.
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