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Highlands Natural Resources - does it think we are stupid? Clearly its shareholders are...

By Tom Winnifrith | Sunday 4 September 2016

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

After hours on Friday came the announcement from Highlands Natural Resources (HNR) that all bar the stupidest folks on this planet, that is to say its own shareholders, knew was inevitable.

The shares had spiked higher to 40p for no reason whatsoever and thus Highlands was happy to reveal that:

"it has issued an additional 5,000,000 ordinary shares in the Company pursuant to the exercise of warrants. The warrants exercised are part of those acquired by an institutional investor (the "Institutional Investor") from Diversion Technologies, LLC ('Diversion'), as announced on 15 June 2016, and which are exercisable into ordinary shares in Highlands at 25 pence per share. Accordingly, as anticipated following that sale, this exercise is a significant event for Highlands and has resulted in the receipt of further new funds of £1.25 million (taking the total new funds received as part of these transactions to £2.50 million)."


Right so 5 million shares means the "institutional investor" will issue a TR1 as he now owns just over 10% of the equity? In fact we are still waiting for the TR1 for the first 5 million warrants exercised which had the II at 13% pre dilution. Oddly that has not appeared.

So let's translate into English what actually happened.

In a dodgy deal in April 2015 DT Ultravert - a company set up weeks earlier - sold rights to some useless technology to Highlands for some cash and a shed load of warrants at 25p. DT is owned by Highlands CEO Dr Price and Dodgy Paul Mendell who refuses to answer a stack of questions about his outrageously dodgy business track record. Since both DT and Highlands were runningout of cash DT agreed to allow a total spiv (the insititutional investor) to buy a shed load of warrants at 1p every time he has forward sold stacks of shares to the Bulletin Board morons. Thus the spiv makes a guaranteed killing, DT gets a few quid and Highlands hets £250,000 per 1 million warants exercised to keep paying the salaries of Price and Mendell as it fails to generate a cent of cash itself and never will..

What's not to like?

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