Replies to post #16421 on Empire Energy Corporation Intl. (fka EEGC)

[WARHAMMER]

howard, i propose fantastic, wow squared.

i truly enjoy your posts,

[BobSinCA]

Regarding dilution, you are correct that the disclosed Sure Capital financing includes no share dilution.

However, the Agreement does say that at least part of the return to investors will be in the form of a percentage of the margin. From Section 3.2.1 of the Agreement (Exhibit to the 8-K):

Party A (Empire) agrees to provide a share to Party B (Sure) in to the project reflected by a profit from the gross returns.

This percentage is currently unknown, but it has the same impact on share value as dilution does. If 50% of the gross margin is given to Sure, that is the same as 50% share dilution (excluding flare gas technology from the discussion), in terms of earnings per share which is what drives share value.

Hopefully, the percentage will be low; IMO, that depends upon how investors view the collateral, and we've separately discussed that one with differing conclusions.