Gediminas Jasionis

Empire Energy Corporation International (OTCBB: EEGC) - One Step Away form Funding

by Gediminas Jasionis February 12, 2010
EEGC logoEmpire Energy Corporation International (OTCBB: EEGC) shares was stirred up, as the SEC approved the $9 million rights offering registered by the management some time ago. Planning to do some oil and gas exploration in Australia, the company desperately needed additional capital to further proceed with well drilling on their properties in the Tasmania region.

Considering that the company was all out of cash, the successful capital collection on this stock offering would spark the business once again. With the SEC's approval that time has nearly come, as the company plans to proceed distributing the rights certificates on Saturday, Feb 13, 2010.

A large portion of the cash anticipated to be received should come from the company's CEO, Malcolm Bendall, as he owns over 9% of the outstanding shares. This entitles him to acquire nearly $1 million worth of stock at a price of $0.07 and would account for a large part of the hopefully successful rights offering.

Expecting a timely cash collection from investors we should actually see some serious volatility in pricing, as dilution occurs. On the other hand, as the new shares will be sold to existing shareholders, this will likely help sustain the price at reasonable levels.

Besides the cash problem, another issue blocking the company's progress is the expired special exploration license. They've already filed with Mineral Resource Tasmania for a new one, but with no response yet, the company won't be able to effectively restart operations even with the extra cash on hand.

Comments 1

1. Guest
February 13, 2010, 09:54AM

Quotes Just because the rights offering is approved does not necessarily mean the shareholders have confidence in the Company and management to invest more money.

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