Exactly Spider. There is NO loan or monies paid to ECT at the outset of this facility. This is the fundamental difference between a bank loan and a deferred payment. The ELF is simply a deferred payment with interest terms. How many times does this need to be discussed here? There is no 3rd Party underwriter. ECT receive 0, yes ZERO $$$$ when you take up the facility. Your options expire at the expiry date. BUT, ECT will receive funds plus interest when you close out your loan facility. What you are paying for is the right to defer your payment on the options for up to 3 years. Basically ECT will allow you to take up your right to buy the same amount of shares taking into account the strike price of your expired options.
So the way I see this playing out. I have 12m Options. If this deal isn't done within 12 months the whole thing will be toast. So I will sign up for the full amount and only pay the strike price plus interest if they strike a deal and a deal that makes financial sense for the company. If they don't achieve this then I will walk away and lick my wounds, my take a lot of time to clean them up.
The company needs to release these docs soon so everyone can be more at ease.
ESI Price at posting:
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