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Non-Tech : Parlux (PARL) Fragrances
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To: peter lo who wrote (154)12/4/1996 5:21:00 PM
From: M Goodson   of 527
 
Don't worry, that debenture to which you're referring has nothing to do with the share dilution that we as stockholders have already experienced; it was redeemed by the company to prevent a further dilution of our shares and the $902,000 charge was the call price (an additional fee paid by an issuer for the privilege to buy back a particular security) evidently stipulated in the indenture (a contract that explains the rights of the lenders and borrowers). Thus, if the debenture had not been repurchased the holders of it could have converted it and, again, further diluted the stock.

There were several issues of convertible debentures outstanding that over the past nine or ten months have been converted. As a matter of fact you can read about them in the company's quarterly reports, those ending in June and September of this year. Through the issuance of these debentures the company raised far more than a mere five million dollars. Again the quarterly reports tell the story and given management's alternatives and the popularity of the company at the time I really can't say I would not have made a similar move. Mind you, the company has no more liability associated with these debentures beyond that charge of redemption for us, the shareholders.
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