acl funding, page-4

tewks

A few quick comments:

1) A springtree facility is really just a running placement at a discount. Springtree does not ever have an exposure to one of their investee companies of more than a few million at a time. Therefore, if you do a deal with Springtree that sees a $1 million convertible note drawdown each month, or some such, you will see the note very quickly converted into shares (at a contractually agreed discount to the trading price) and sold into the market.

2) With that in mind - the degree to which a Springtree facility acts as a "drag" on the share price is entirely a function of how much demand there is for shares on the open market. MR and his buddies at PRR did a fantastic job of harnessing support from many corners of the market over the course of a couple of years. . . . with the result that there was a ready pool of demand for Springtree to sell into. This was an almost singular result. I would be surprised if Pete could match this, and therefore the question you have to ask yourself is where the ACL share price would be if there was an extra $1 million (or whatever) of relentless selling each and every month.

3) A bank won't lend to ACL. Just doesn't meet commercial lending requirements.

4) A hedge fund with relevant expertise will lend to ACL. At a guess - they will be looking for deal terms that deliver them an IRR of 15-25%+ through a combination of a) coupon, b) warrants, and c) conversion price upside. Maybe an interest rate of 8%, right to convert at any time at 45 cents, and maybe a few 45 cent options/warrants as well.

That's all

GD