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fernandohmm10 1 post  |  Last Activity: May 11, 2015 7:05 PM Member since: Jun 9, 2010
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  • At first sight, ERHE seems a half millon market cap company, with very interesting assets, worth multiples of current share price.
    The problem is that company┬┤s convertible debt, at current market prices, have the potential to increase the share count by around shares (more than 6 times the current amount of shares outstanding).
    According to last 10Q report, convertible debt at Dec 31, 2014 was roughly US$ 1.250.000 at face value (note 4 to financial statements).
    ERHE issues additional convertible debt for US$ 250.000 at Feb this year, for a total balance oustanding of roughly US$ 1.500.000
    This debt could be converted into common shares at a price reflecting a discount of 40% t0 60% of stock market price (note 5 to financial statements).
    Assuming an average discount of 50%, the convertion of all debt oustanding will increase the total share count by shares (US$ 1.500.000 / (0.0005/2).