Compliant lodged with ASIC, page-9

My understanding of the situation:

DR entered into a short term cash advance arrangement ($500k, not sure who this was with but would be very interested to know) in mid April. This had to be repaid around the end of May. The HOPE was that this could be paid off with the funds from Magna (which had not been finalised at that stage) and with proceeds from a farm down on the Seychelles asset (which was being discussed, but was not finalised). These funds were spent, or largely spent (I don't know exactly how much), on fees, consultants, and possibly a deposit related to a near production asset (with the goal of providing stable cash flow).

When the Magna deal was finalised (13/5) the draw down profile meant that this alone would not be enough to pay off the debts. This meant the short term debt could only be fully repaid if a farm out was achieved within around 2.5 weeks of the Magna deal closing. Presumably, at some point the interested party walked away.

When this happened, effectively WHL was facing a situation where it couldn't pay back the $500k in time (within a few days) without emergency funding. Why there wasn't enough left on the balance sheet to cover it, I don't know. Even post the Argonaut payback there was, from memory, over a million on the balance sheet at the end of last quarter. As such, DR was shown the door, and the other two board members were panicked into finding whatever funds they could. They knocked on the door of ECP (who I think had introduced WHL to the Seychelles acreage in the first place all those years ago) and they of course knew we were bent over a barrel, already strapped down. How hard the board worked to find other routes of funding is hard to say. Surely they could have negotiated a short extension with the short term lender, at least long enough to come back to us, the holders, and say here's the deal, pay up or we go bust. At least we would've had an option then. From the lenders point of view, what difference would there be between liquidating us now or waiting a few weeks and liquidating us later if the capital raising failed?

The convertible notes are only a mechanism to get around the fact that the board needs our approval to issue over a certain number of shares (15% of those outstanding I think). They can issue convertible notes without our approval (as they have) and retrospectively ask for permission to issue the shares that underpin them. In the meantime the terms are such that if we say no to the share issue, the convertible notes are immediately in default and ECP will be able to bankrupt the company, and if we find other funding at preferable terms to us, the original shareholders, the $400k break fee will also, effectively, bankrupt us.

It would be interesting to know if ASIC consider it reckless to take on and spend short term funding the repayment of which is contingent upon sealing another funding arrangement AND completing a farm out - in the current environment - in a window of just a few weeks.

I'd also be interested to know if the Robert Richter who has recently (within the last few months) popped up on the top 20 WHL holders list with around 1.5m shares is the same person who is high profile barrister Robert Richter QC? If yes, I wonder what he thinks about all this?