Replies to post #10438 on ERHC Energy Inc (ERHE)

[Mongo1071]

I'll make you a gentlemans wager Balance....

I'll bet that within the next three quarters, there will be additional financing or significant stock sales or both to fund operations. Heck if you read the most recent 10Q they are using lots of stock already...

"...Effective January 1, 2005 the Company entered into consulting agreements with two individuals, which requires payment of cash and the issuance of options for a total of 1,250,000 shares of common stock upon completion of a full year of service. These options have an exercise price of $0.20 per share and will vest immediately upon issuance and will have no expiration date. Either party may terminate these consulting agreements with 30 days notice. The options issued under these consulting agreements include provisions for cashless exercise...."

But, I'll be big about it and exclude those 1.25 million shares from our wager (I just love the 'cashless exercise' deal... somehow I get the feeling that it is related to the new offshore division and that a whole lot of the participants in ERHE are not American citizens and might not be 'keen' on US Taxes, but that's a whole different story.)

and on top of that let's not forget this little gem....

"...We believe it is likely that the financial
statement impact from the implementation of the requirements of SFAS No. 123(R) will significantly impact our future results of operations and we continue to evaluate it to determine the degree of significance..."

That's a catchy phrase..."significantly impact"

Anyhow..back to the wager..if I'm right you will banish yourself from this board forever...If your interpertation is correct and the company is accurate, then I will leave here never to return....

Care to take the bet?

Mongrel

[Mongo1071]

One more thing Balance....

Since there is working capital of $827,453, then the monthly expenses should not exceed an average of about $68,954 per month, or an average of $206,863 a quarter.

The last 10K listed the following annual operating expenses
2000 - $1,958,880
2001 - $6,394,810
2002 - $4,084,210
2003 - $3,153,882
2004 - $3,757,185

Taking an average of the last 3 years gives equals about $3,665,092 per year. You and the company would have the shareholders believe that costs can be reduced from $3.6 million per year down to $.83 million per year at the time that the company is supposedly ramping up to finally do something? How can that be?

One more bone to pick....why did ERHE have to pay rent to share the offices with CHROME, and according to the 10Q, not a dime was paid by CHROME to rent the office space from EHRE? Sounds like a sweetheart deal at the expense of the shareholders yet again....

Mongrel

[Mongo1071]

And just one more thing....

"...The company will pick up cash in one of their block deals that will be added to their current working capital..."

Wow. That is indeed amazing. Not only will ERHE be fully carried for its working interest in the JDZ, but they may even get cash up front? Now that's a novel concept in the deepwater oildrilling & exploration business....no money up front, no money to drill, no money to bring in production and on top of ALL of that you get paid cash up front.

I'd LOVE to see one other example in the whole wide world where that has occured.

Mongrel