Shareholder Interest Group (Revolt-ing), page-18

Bobby I can understand why you feel the way you do but as it stands, you as a note holder are bound by the terms of the contract note and if the compulsory conversion is triggered then you must convert, no question about that.

I don't know how many shares were on issue at the time that the con notes were issued but I will hazard a guess and say that it was less than 500m shares. Now assuming 50% of the company at that time supported the notes and their combined shareholding amounted to 250m shares (50%). Those same shareholders today own about 10% of the company so the majority of current shareholders are not note holders and I imagine would like to be rid of a $13m debt for the issue of about 35m shares.

The question I don't know the answer to is why did this compulsory conversion clause get added in the first place? Could it have been to give the note holders a significant advantage over shareholders in the event of a take over bid at prices above 38 cents a share? I'm guessing the note holders would not have agreed to the conversion clause unless they thought it would be in their interests and that's why I claim that the note holders took a gamble to lock in the perceived tremendous upside potential in the share price which has not played out.

As it stands, for the sake of locking in that potential upside, the note holders could be down about 95% on their investment. This is no fault of shareholders that have come in to this company recently.

Bobby, if it is any comfort to you, I don't see any other company making a bid for KBL because of its high debts and intense capital requirements to prove up more reserves.