50 mil bond strategy, page-15

10MC,

When the $50M CBond agreement was made I believe that as part of that agreement was that the ist $1M beicssued. And that is all that has been issued so far, $1M whcih i expect CTP has deposited into the bank account.

Each $1M CBond issued converts to 12.5M shares. The issuer ACBO/DBZ has the right to convert the issued bonds to shares whenever it requires. It now has done this twice for 3.75M shares for $300K each time. It still has $400K to convert if it wants from this 1st $1M.

Why the convertible bond agreement?

The recent announcement re partnering with EIR to explore, where EIR will share in 60% of the cost gives the reasoning. The remaining 40% will most likely come from CTP's working capital of some $30M.
Now what about the other partners to come?. They will also share in the exploration and so will CTP using its working capital. This way with partners, the exploration and drilling costs will be shared but CTP's working capital will be spread and will go a long way to exploring and drilling this immense exploration area.

But when the working capital is reduced and CTP require further working capital eg to possibly top up drilling or pay the payroll then they can draw on the convertible bonds $1m at a time.

However and I am sure that JH would be thinking on the lines that positive drilling results will boost the SP and possibly revenue and again using the EIR announcement where EIR will

"pay a “Reserve Premium� of $10,000,000 per trillion cubic feet of gas (TCFG) or oil equivalent, which may be discovered and independently verified at 3P reserve level"

This way the other convertible bonds yet to be issued will not be required hence no dilution. However if they are needed they are there to fund the companies development plans.

Regards, JJ