Glori Energy Inc. (GLRI): announcements explained, share price

Announcements, explained

Each one in plain English, with the numbers worked through for a shareholder.

17 June 2014capital raising announcement● Neutral

The two sponsors (Infinity and Hicks) had lent the pre-merger shell $500,000 in January 2014 through convertible notes. They converted the notes into 1,000,000 new warrants at $10.00 per share, expiring April 14, 2019. On June 12, 2014 Glori exercised its right to convert each warrant into 0.10 share, and the filing says the company received no additional proceeds. Inference: this would turn the 1,000,000 warrants into about 100,000 shares, but the filing does not state the share count, so the effect on existing holders is small and not quantified. Those shares are covered by the S-3 filed May 29 and amended June 16.

Discuss in chat

6 May 2014capital raising announcement▲ GoodMajor

On May 1, 2014, Glori issued 909,982 new shares at $8.00 each to investors who exercised an option under the January 7, 2014 Share Purchase Agreement, raising $7,279,856 for working capital. Combined with the $8.5 million invested at the April 14 merger closing, the press release says private placements total $15.8 million and total outstanding shares are about 30.5 million, so existing holders are diluted by the new shares. The filing also furnishes a notice that CEO Stuart Page and CFO Victor Perez will present at the Robert W. Baird conference on May 8, 2014. The CEO's quote says the funds support a strategy of acquiring oil-producing properties to demonstrate the AERO System.

What it means for a shareholder

909,982 new shares at US$8.00 to raise about US$7.3m. That's 2.9% dilution: every existing holder's slice gets 2.9% smaller. If you held US$1,000 of shares (125 at the issue price), your slice goes from 0.00041% to 0.000398% of the company. To keep it you'd need 4 more shares - about US$32 at the issue price.

Create a free account to see this worked out for your own holding.

Discuss in chat