The exact text from latest registration statement...
RISKS RELATED TO THE OFFERING
SHARES ELIGIBLE FOR FUTURE SALE. Of the 15,652,790 shares of the
Company's common stock outstanding prior to the exercise of any Series A
Warrants, 1,808,506 shares are freely tradeable or are eligible to be sold in
the public market, and the 950,000 shares of Common Stock underlying the Series
A Warrants will also be freely tradeable immediately upon issuance. All the
remaining shares of Common Stock presently outstanding are restricted and/or
affiliate securities which are not presently, but may in the future be
sold into any public market that may exist for the Common Stock, pursuant to
Rule 144 promulgated pursuant to the Securities Act of 1933, as amended (the
"Securities Act"). Future sales by current shareholders of substantial amounts
of this common stock into the public market could depress the market prices of
the Common Stock in any such market. See "Shares Eligible for Future Sale".
POTENTIAL ISSUANCE OF ADDITIONAL COMMON AND PREFERRED STOCK. The Company is authorized to issue up to 50,000,000 shares of Common Stock. To the extent of such authorization, the
Board of Directors of the Company will have the ability, without seeking
shareholder approval, to issue additional shares of Common Stock in the future
for such consideration as the Board of Directors may consider sufficient. The
issuance of additional Common Stock in the future will reduce the proportionate
ownership and voting power of the Common Stock offered hereby. The Company is
also authorized to issue up to 5,000,000 shares of preferred stock, the rights
and preferences of which may be designated in series by the Board of Directors.
To the extent of such authorization, such designations may be made without
shareholder approval. The Board of Directors has designated one series of
Preferred Stock (Series A) and issued 209,207 shares of Series A Preferred
Stock. The designation and issuance of series of preferred stock creates
additional securities which have dividend and liquidation preferences over the
Common Stock offered hereby. See "Description of Securities."
Based on the September 30, 1997, unaudited interim consolidated
financial statements of the Company, the net tangible book value attributable to
the Common Stock of the Company at that date was $1,081,017 or approximately
$.07 per common share.
Remember this is a company with an implied valuation approaching
$180 million dollars. As of September 30, 1997 they only
had $1 million of tangible book value.
- brian |
