EDM 0.00% 0.1¢ eldore mining corporation limited

funding is a legitimate equity line of credit

  1. cvr
    30 Posts.
    The AGS funding is a perfectly legitimate financing called an Equity Line of Credit which numerous funds do including Springtree and Truestone. Anthony Hamilton who is also the CEO of Modena entered into the same type of Equity Line of Credit Structure for Modena with Truestone and you will notice that the value of the stock dipped after. Since Anthony Hamilton signed the same type of equity line financing with Truestone, he knew exactly what he was doing with the second equity line financing. It?s never a good idea to sign two equity line of credit financings as that can create too much downward pressure with both funds competing against each other to sell stock into the market which everyone knows that is how equity lines of credits work. These equity line structures as with any equity structures with warrants, options or free stock create overhang and dilution. When the market sees these freely trading shares at zero cost basis they usually sell in fear that the stock will be sold since these type of financings cause dilution with the funds selling stock into the market.

    If you look at Section 3.8 of the AGS Agreement, ?Trading Activities?, the trading of all shares including the free commitment shares received by AGS was expressly allowed in the Agreement, thus, it appears that all the selling was done in accordance with the agreement and the law. Section 3.8 states that ?The Company acknowledges, without exception, that the Investor has the right to sell Common Stock at any and all times during the Commitment Period.? If EDM wanted to prevent this selling, they would not have allowed this clause.

    If you look at the filings you will note that when the stock price of EDM dipped from .005 to .004, AGS did not sell any stock that day, nor the day after, so it was obviously someone else driving the price down.
    What EDM should do next to increase shareholder value is obtain some non-dilutive debt financing with no warrants, options or free trading shares.
 
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