la jolla & escrow

Hi All,

This may not be a popular post but just wanted to share my research..

RE La Jolla
In Dec 2011 we secured funding via LJ for $6MIL over 3yrs. AEB have been issuing shares an a weekly/monthly basis as funds are required. Unfortunately the issue price has been falling due to the vwap over this period and as LJ are in it for a quick $ profit the prices continues to be under pressure and the next issue will be at even lower prices. This is just the way LJ works.

Since Dec2011 LJ have been issued over 5MIL shares at an average price of 0.29c. AEB has traded 29MIL shares since 15 Dec so LJ have managed to offload without decimating the SP.

There is still $4.5MIL worth of shares still to be issued until Dec 2014, so the SP will remain under pressure until then.

This is not to say positive news will not move the price it just means we may not see the full potential moves based on positive moves forward by AEB.

Escrow
Now this is a concern in itself..215MIL shares coming out of escrow Jan 2013.

Ok 200MIL are owned by Mr Stroud and Mr McConchie but if they decide they want to cash some in there will be alot of shares to soak up..I realise they would not do it all in one hit but still a scary thought that 90% of the share register will come out of ESCROW in Jan 13.


All IMO and DYOR...Sorry if it looks like I am being negative, i am simply doing my research and this is the facts I found.

I am still very keen on AEB long term but can see any real action in the share price until we get passed the above.

Cheers

RR