Ann: Convertible Note Update - Strong Support Received, page-4

Well without going into an accounting class ...

1. Familiarise yourself with FLG's balance sheet ... that is where you see the convertible notes. Last financials are as of 30 June 2024 (and its in US$). They are a debt instrument (because they can be redeemed in cash as opposed to equity)



Those convertible notes were issued 16 Feb 2024 ~ AUD$895K. They had a 12 month term. And now you should see the significance, being that it is now 22 Feb 2025. DISCLOSURE - I am invested in these notes. Since the current share price is below the conversion price I would ask for my money back instead of converting into equity. But if you look at the Qtrly report 31 Dec 2024 you would see our cash position. You really don't want to do an equity raising simply to repay maturing convertible notes. Add to that, FLG has an additional swt of Convertible notes (AUD$250K) issued 1 Nov 2024 that has a term maturity of 18 months (and convertible after 6 months).

This announcement in particular is saying that 85% of the $value of notes have been either extended the maturity term (that is what happened to chose to do) or pledged to convert into equity at the next placement -that's what ongoing support means. And by extension this means only ~15% were redeemed for cash, and that's good because we don't have much cash



What it also means it will be easier to raise the capital because the C-Notes are not competing for that capital. FLG needs that capital to drill Rosario. And therein lies a bit of a conundrum. Exploration drilling isn't being rewarded in the market at present and you can buy an asset cheaper than you can drill it. But you can't sit still either as these properties have holding costs.

So its a challenge. Know why you are invested in a stock and of course DYOR ... is this - risk - suitable for you?