And it goes further than that since the CEO is responsible for managing debt, IMO. CB chose to not pay down the note to Johnny when he had the shares to sell. Thus, that fact led a situation where he apparently referred to the note owed to Johnny by apparently telling many investors by phone that if this proposal did not pass, then he would dissolve the company.
What if he had paid down the note to Johnny when he had the shares to sell? Would that not have been in the shareholder's best interest? Would the shareholders not have been much more likely to be in agreement to authorizing more shares under those circumstances, instead of creating the giant conflict of interest that this proposal is? Would the elimination of debt not have likely increased interest in the company?
Similarly, the banter about the "defaulted loans" on this board has been a travesty, IMO. It is not the amount of money in the listed defaulted loans that is so important, IMO- it is the fact that defaulted loans are spread all over the SEC filings for many years.....along with the defaulted Fed unemployment taxes. These are the kinds of things IMO that would make bankers raise eyebrows, and also the things that lead to bizarre financings like the variable convertible debentures that many call "death spiral financing." If you search through the public domain, there is a whole set of reference points related to that type of financing that cause other problems by causing the share price to go down as the financings evolve. Once those types of financings are spread throughout the SEC filings, then the likelihood of prudent investor groups like funds getting involved drops significantly, IMO. In essence, the whole thing evolves on itself.
Now, on top of that it now appears that we have a CEO who has chosen to create a conflict of interest situation with the preferred share non-split, rather than giving himself a vote of confidence by taking an option package that may have signalled to potential investors that he really believed in his ability to grow this company's revenues and projects. Do you really think that this point is lost on honest funds that might consider investing in AMEP?
Though the above are only a small percentage of the red flags that inundate the SEC filings, they are significant IMO. Just look at what Tsipperhorn has had to say. Up to this point he has told you what would happen, and he has also told you the next move the company would make. He also has told you that in his opinion, any further financings would likely be done at below the share conversion of 1/2 the bid price. Doesn't that mean that in Tsipperhorn's opinion the company has weakend itself further in the financing ability arena?
IMO the company would need to change the way they do business 180 degrees on the financial side to be considered credible. And on the oil side no new well has been presented as stabilized, completed, or whatever basis a successful well might be defined to date........in conjuction with the company's rigs. Some have started to dis the terms "stabilized" as a successful completion of a well, but those are the terms that CB has defined, himself, to shareholders from what I have seen.
I wish no ill for CB, the company, nor the shareholders; but to look at the future with potential rosy scenarios when the past might be seen as mostly failed promises is crazy. Yes, I had high hopes for the company until recently, but there comes a point where one must reevalutate based on lack of progress. At least when I reached that point, I stated that very honestly.
I think he will likely make the decision to do exactly what Tsipperhorn has suggested- another red flag to come. I think it will be heralded by those who do not look deeper, but in reality it will likely be a sign of what is to come............history repeats way too often.
Also, in terms of history repeating I'd expect that seeing CB advance money to the company in the latest Q after seeing how he handled the set of advances that led to the preferred share fiasco in the proposal, should send chills down investor's spines. Does that fall under the auspices of "Fool me once, shame on you- fool me twice, shame on me?"
Please understand that issuing shares has never been the issue- it is all of the reference points around financing the company that fall outside the fundamentals of how most successful companies run a business, IMO. Can anybody show me examples of companies that did financings with variable convertible debentures priced at conversion of shares for 1/2 the bid price (with no restrictive protective covenants on those shares) and that ultimately did a reverse split; whose share price was higher one year, later? All I can seem to find are companies whose share prices moved to lower lows......and then continued on down.
(Tsipperhorn, you sound like a very intelligent gent in terms of financings. Can you give me some examples?)
Could this company make hay in light of the above? I suspect the answer is "yes" if the company can complete several very successful wells that the company owns a high proportion of the production in, but I also suspect the number of successful wells would have to be a multiple after the proposal than the number before the proposal. Depending on the terms of financing in connection to selling authorized shares, we might need a multiple of a multiple. Thus, it seems to me that the chances of investor success has dropped dramatically unless the company changes the way it does business in a dramatic way.
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