the_old_trout
24 Aug 2019
New funding £1,500,000 Dusty, the mechanism for calculating the conversion price is not in dispute and hopefully there is simply a flaw in the RNS where it refers to 2.15m shares at nominal value being issued. It is essential that point is clarified in next week’s conference call, if not before via RNS. On the short selling issue they can’t and don’t need to do that. They simply have an agreement with one or more market makers to pre sell the stock in the knowledge that they can deliver at the end of the 30 day period. It’s a no risk arrangement for Bergen with bonus shares on top as their reward. As discussed I hope and expect that MK has a plan in place to feed some news into the market to help sustain the share price and limit dilution during the selling phase Atb, Tot
dustofnations
24 Aug 2019
New funding £1,500,000 Hot off the press, from Bod100, our resident finance expert (nb: his private opinion only, not advice): Dusto you are absolutely correct. The convertible security must first be converted into shares . The conversion price is clearly stated as either a) 5 daily volume weighted average price during a specified period before the conversion date or b) they can have £800k worth at 5.78p AND they can’t convert within the first 30 days. They DO NOT CONVERT AT OUR NOMINAL VALUE OF 1p. We ALSO need to approve at AGM an increase in head room to allow conversion of some of tranche 1 and all of tranche 2 BUT Bergen will fund the entire £2m of tranche 1 without waiting , an act of huge good faith in my opinion BUT imagine they have driven our share price into the rubble? By 30 September one of our partners is on a timeline to get something away. If they do the share price will rise Why was b) stipulated? It is not normal; it gives Bergen £800k at 5.78p If Bergen were not interested or thought this totally irrelevant why is it there? We are not in a death spiral funding aka UKOG was for example. We have definite prospects for seeing a significant share price rise within the 30 day minimum period that Bergen must wait BEFORE ANY CONVERSION can occur WOULD YOU SHORT under these circumstances/laid down conditions? It is also banned in the agreement but I appreciate some would argue that rule can be circumvented BUT for any shorting to win you HAVE to be able to buy the stock you have sold without owning at a cheaper price than you have sold and Bergen can’t convert for 30 days, to me this is another very clever and protective condition in my opinion. Then in a year Bergen have the right to the 2nd tranche of convertible security AND to get this our market cap MUST be double where we now are (the 3.5% rule). I think this is VERY clever on Mike’s part We won’t need the money then, if no deals by then we all lost. I think this is there as a huge carrot to ensure WE ALL PLAY FAIR. IMHO, this is a CRACKING DEAL Example of hypothetical conversion: JEZZ, you’re spot on with the maths – £2m at 10p conversion price 20m shares
dustofnations
24 Aug 2019
New funding £1,500,000 @the_old_trout hmm, I think you have made a mistake with your calculations; AIUI the investor only receives a convertible security (CS) for their investment, the CS must be converted into ordinary shares using the algorithm described in the document: The conversion price of the Convertible Securities is (a) the average of five daily volume weighted average prices of the Ordinary Shares, during a specified period before the conversion date, rounded down to the next 1/10th of a penny, or (b) 140% of the average of the daily VWAPs for the 20 trading days immediately prior to the execution date of the Agreement, being 5.78 pence per Ordinary Share (“Conversion Price Bâ€). The Investor may only utilize Conversion Price B for Convertible Securities with a par value of no more than GBP800,000. They do not get ordinary shares on a 1:1 basis or at nominal price; you need to plug some hypothetical figures into the the formula to work out approximate numbers.
the_old_trout
23 Aug 2019
New funding £1,500,000 Thanks Fillpot. I have been around the block a bit with investments in dozens of AIM listed companies over the years and have witnessed what some of the vulture funds have done to some of these companies, and it ain’t pretty. Having done a bit more research on Bergen they might be the best of a bad bunch as they don’t invariably pre sell all the stock to be issued to them in as short a period as the worst culprits, and neither are they allowed to benefit from shorting QFI’s stock under this agreement. However I am aware of at least two companies who have prematurely terminated agreements with them because of the dilution their selling was creating. Dusty, my calcs on the amount of stock to be issued under the first tranche of the agreement are based on the fact that the RNS informs us that “An initial tranche of Convertible Securities with a nominal value of GBP2.15 million (the “Initial Trancheâ€) will be subscribed for by the Investor for GBP2.0 million.†The nominal value of the shares is 1p, so if you divide £2.15 million by that you get 215m shares and the same amount in the second tranche, although I doubt whether those will ever be issued. I take some comfort from the fact that Bergen can’t request conversion of the initial tranche within 30 days of having subscribed for them. However without having sight of the actual agreement I would surmise that that would not prevent them from starting to sell the stock as early as next week. As I indicated in my earlier post I therefore hope that Mike Kirk has a plan is place to flood the market with news that they can sell into over a thirty day period. However PI buying is likely to be contrained by the open offer and warrant arrangements unless the share price falls below the offer price, so it would be down to new buyers flying in to get a piece of the action or existing holders wanting a bigger piece of the pie than they can get in the open offer. I agree that questions around this issue need to be put to MK during the call next week but until we know the timings I am not sure if I will be able to take part. ATB, Tot
Fillpot
23 Aug 2019
New funding £1,500,000 Dustofnations ToT does have a great deal of experience in dealing with AIM listed companies that have borrowed in similar ways. He can answer with his own logic re calculated number of shares. But I do understand his slightly negative tone here. We get some steady good news or the issue of shares forces our price down. That seems to me the way these work
dustofnations
23 Aug 2019
New funding £1,500,000 Bergen are a reputable investment fund (despite some of the derogatory terms being used by QFI short trolls!). Congratulations to the team, this agreement appears to be very well structured and on fair terms. It should bridge us through into commercial production, should the team manage to execute on the excellent pipeline they have built up. Measures are described in the agreement that indicate short selling is forbidden, and they are incentivised to hold long. I expect that other pathological behaviours such as forward selling are also not allowed. You should certainly clarify that with MK in the call next week if you are concerned about it. The numbers I get for the first tranche are only in the ~100m shares region, which seems a very fair number to me. Hope others can also calculate so we can cross-reference our numbers.
the_old_trout
23 Aug 2019
New funding £1,500,000 Thanks for making the effort Fillpot. That is a very useful piece oof information. Have a great weekend, Tot
Fillpot
23 Aug 2019
New funding £1,500,000 Go ToT This from ii just now Thank you for your secure message dated 23rd August 2019 regarding the Quadrise Open Offer. Unfortunately, we are unable to facilitate transferring subscription shares received in an Open Offer to a trading account as they are non-transferable. This means that we are not able to transfer your subscriptions shares held in our ISA nominee account in Crest to our Trading nominee account held in crest and is therefore, not something we can control. For future reference had you been able to take up the Offer in you ISA account you would be able to transfer the warrants upon receipt in to your trading account for future conversion. So I think that your warrants are ok but my oversubscribed ISA is a problem for me!
Lastemporer
23 Aug 2019
New funding £1,500,000 "“We are delighted that we have been able to secure the funds to enable Quadrise to build on the considerable momentum generated in 2019 and to progress the multiple opportunities announced during 2019 towards trial projects and commercial contracts. This includes, for example, the activities in Kuwait, Saudi Arabia, Europe and Morocco, alongside the upstream market initiative with Merlin Energy Resources that we announced on 14 August.†Really need this to happen, otherwise it’s going to enter a death spiral, especially if it needs another funding AGAIN next year. Just look at something like AMC.
the_old_trout
23 Aug 2019
New funding £1,500,000 Well I now hold most of my stock in an ISA with II Norris, so i do hope that they will allow us to hold the warrants in our trading accounts, assuming I take up my allocation under the open offer. I feared that they would get into bed with Darwin or Yorkville for the main tranche of funding but instead we have Bergen who I have no experience of, but I am glad to see that the agreement has some safeguards built into it. However we do need to appreciate that the commencement fee shares work out at an issue price of 3.59p and will almost certainly be sold into the market next week, so I am not gettting too carried away with today’s rise. Ditto with the collateral shares, so unless there is some further news to encourage buying there will be downward pressure on the share price. Then if my calculations are correct we have roughly 215m shares to be issued under the first tranche of the agreement and if Bergen follow the practices operated by some of the vulture funds these will all be pre-sold into the market during a concentrated period culminating in the calculation of the conversion price. We’ll know when that process has started as volumes will be massive and it is therefore essential imo that the company manages to issue some decent news for them to sell into. Otherwise I think we might see new lows in the share price, and the buying opportunity of the century if the company can then announce a commercial contract. However I hope the board are shrewd enough to know that Bergen are highly likely to pre-sell stock and have a plan in place to generate the buying volume necessary to absorb their selling. ATB, Tot Happy to receive well balanced counter arguments
Norris107
23 Aug 2019
New funding £1,500,000 Seems to be a brilliant RNS to me . . . ‘The Intended Open Offer will be priced at 3.96 pence per new Ordinary Share and with warrants, on the basis of one open offer warrant for every two Ordinary Shares subscribed for under the Intended Open Offer, to subscribe for new Ordinary Shares at a price of 7.48 pence per new Ordinary Share for a period of 36 months from issue . .’ The warrant offer seems, on the face of it, to be very attractive and is for one share @ 7.48p for each 2 purchased @ 3.96p (bargain) and the warrant shares can be bought and sold within 36 months of the offer - so in theory we could buy at 7.48p regardless of the share price at that time! I guess you could sell them immediately for a quick profit or more prudently wait for a massive rise on good news - However there seems to be ‘issues’ regarding the warrants if your shares are held in an ISA - there’s lots of discussion about this over on the quadrise shareholders forum and I found a post from burble61 who posted Hargreaves Lansdown’s take on the situation that I thought was very helpful - here’s a copy/paste:- warrants can be held in a standard Trading Account, but not in an ISA (HMRC regulations - you can understand why, it would be a way of circumventing the annual subscription limits) they have the capability of holding/“transferring†warrants arising as a result of shares held in an ISA into a Trading Account - if this happens for a particular situation depends on how the warrants are structured we won’t know that until the full documents are issued - in the case of HL, they will then highlight a Corporate Action to shareholders on their platform giving the options available to them. That will be interesting but it seems that most appear very happy with every other aspect the RNS
Fillpot
23 Aug 2019
New funding £1,500,000 Yes jaytee41, here it is [link] Highlights 23 August 2019 Quadrise Fuels International plc (“Quadriseâ€, “QFI†or the “Companyâ€) Convertible Securities, Issue of Equity and Issue of Warrants Quadrise is pleased to confirm that it has secured funding of £2 million, being the first tranche of an issue of convertible securities, to progress recently announced business development opportunities towards trial projects and commercial contracts. These funds will secure the Company’s financial position through to June 2020. In recognition of the continuing support from long-term shareholders, the Company also announces that it intends to offer existing shareholders the opportunity to participate in an open offer of new ordinary shares in the Company with warrants attached. Quadrise will be holding an investor conference call during the week beginning 26 August 2019 to provide shareholders with an opportunity to ask questions on recent business development activities and on the funding now secured. Quadrise has entered into a convertible securities issuance deed (the “Agreementâ€) with Bergen Global Opportunity Fund, LP (the “Investorâ€), in connection with an issuance by the Company of zero coupon convertible securities in two tranches (each, a “Convertible Securityâ€, and collectively, the “Convertible Securitiesâ€) having an aggregate subscription price of up to £4.0 million, a par value of up to £4.3 million and being convertible into new ordinary shares in the Company (the “Transactionâ€). The Investor is managed by Bergen Asset Management, LLC, based in New York, which is an institutional investor with a particular focus on direct investments in small-cap companies around the world. Quadrise also confirms that the Company intends to offer existing shareholders the opportunity to participate in an open offer of new ordinary shares of £0.01 each in the Company (“Ordinary Sharesâ€) to raise up to a maximum of £1.5 million (the “Intended Open Offerâ€). The Intended Open Offer will be priced at 3.96 pence per new Ordinary Share and with warrants, on the basis of one open offer warrant for every two Ordinary Shares subscribed for under the Intended Open Offer, to subscribe for new Ordinary Shares at a price of 7.48 pence per new Ordinary Share for a period of 36 months from issue attached. The Intended Open Offer will enable existing shareholders to participate in a new issue of Ordinary Shares and warrants as part of the Company’s overall funding requirements in order to advance its business development initiatives. Great news and we are to be involved too!
jaytee41
23 Aug 2019
New funding £1,500,000 See today’s RNS 
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Norris107
20 Aug 2019
New funding £1,500,000 Hi Fillpot - we always seem to ‘fall at the last hurdle’ every time we get close to a deal - I’m not going to list them all cos us LTH’s have them engraved on our memories for ever but never the less I’ve decided that I’m going to see this through to the bitter end . . Champers or Chite! I’m kind of ‘programmed’ now to expect the worst but made the decision a long time back to see this out because the likes of QFI & PHE all makes sense to me - I’m into making a few bob, given the chance but I’m already ‘comfortable’ and just want them to succeed and for that reason I’m going to start scraping together to support one last OO as my contribution in trying to help save the planet. As always - best wishes & GLA
Fillpot
20 Aug 2019
New funding £1,500,000 Yes Lionel.thain it does calculate to £1.5m required to get us into H2 2020 still operating at today’s costs. But the RNS only qualified the finance part taking us to then as a minimum! It also stated that anything further from pi’s via the OO element would be beneficial to that. Some discussion on the QFIForum that we might be looking for funding to cover capital expenditures required to drive partnership projects in the near term before Q3 2020!
