Posted this as a reply on the other board, so I will put it here for reference as well:
Quote:
If it is done through all convertible debt, yes. If there is private placement, then depending on the interest, it could be a big chunk. A qualified investor that places 1mil is 1/10th of that. As a side note, if you recall the Fort Stockton Pioneer piece, it noted that Jack and Congressman Hurd were accompanied by "Project Investors" so perhaps they have interested parties already.
It's desirable here (to me) for MMEX to try and re-acquire something like the Crownbridge deal or better in my opinion. That's desirable, but more important, the key thing with them taking out notes on MMEX is the pps, if it improves, then the current notes and any future notes will convert to fewer shares.
On pure hypothetical, lets say they can raise half via private placement (I'd wager they could do better) and they need to raise the remaining 3mil themselves. Look at the impacts below (I didn't include interest):
$3mil @ 40% @ .004 = (3,000,000/.0024) or 1,250,000,000 shares
$3mil @ 40% @ .016 = (3,000,000/.0096) or 312,500,000 shares
at a better discount rate:
$3mil @ 20% @ .004 = (3,000,000/.0032) or 937,000,000 shares
$3mil @ 20% @ .016 = (3,000,000/.0128) or 234,375,000 shares
Its pretty obvious that the improvement in pps is lynch pin to this whole process. So private placement is big, and share price improvement is big.
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