Troyty, excellent post.
Just to clarify, any such dilution is book neutral for ERHC. Thus Stockholders' Equity neutral on ERHC's books, as Sneak said.
The assets in this case, would be the capital. Capital is an asset, as are rights, (what we typically called assets on this forum). The difference being the value of the capital is known, whereas the value of rights is not known until they are monetized, or developed. Thus cash is an easy to value asset, whereas drilling rights are a difficult to value asset.
I also agree that this is a tempest in a tea cup at this point and just fear mongering, as the CEO has said, due to the current share price. However, we can expect that there will eventually be book neutral dilution at a later date, when the share price is significantly higher, as is the stated intention of the company. (Book neutral, but resulting in a lower ownership percentage of more valuable shares for an individual with a piece of the float pie.)
It’s really the whole purpose of a public company, to be able to raise money through the issuance of shares to build its business.
Thus we have the opportunity to predict this, and add those shares now at ~.093 , instead of waiting for whatever share price we are at if and when the expected dilution occurs.
I would agree with Strategyone that a more likely shareprice level would be .50 - $1, and if it occurred during a period of an appreciating shareprice, the individual shareholder seeking to maintain his same piece of the pie could end up chasing a rising share price and would be paying at least 5 to 10 times more for the additional shares. So the decline gives us the opportunity to predict this and add at a lower cost, which would not be the case if new shares were added during a rising share price.
Alternatively, if the shareholder is focused on the shareprice, and not on their fractional ownership percentage, this is entirely a non-issue.
IMO, whether commercial oil and gas is found, and in what quantities, and whether additional prospective rights or producing properties are added, will have a far greater impact on the eventual share price. Thus ~21% more or less shares in the float will likely be far less of a factor, if any.
So personally I added far more than 21% of my initial position sub 10 cents. But as a bet on future share price appreciation, not to maintain a set ownership share.