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Non-Tech : Cable & Company (CCWW)

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To: Gary Lutz who wrote (83)	3/27/1998 4:44:00 PM
From: maurice18	of 157

Definite 30:1 reverse split. Just worked through the private placement. It is for 40 to 80 units of Series c preferred and warrants. Each unit is $50,000 and buys 5000 shares at 10 each of series c preferred and 5000 warrants to buy common. The series c preferred in turn is convertible/exchangeable for series d prefferred. the series d is a public offering of 10 mill (imillion shares x 10 per share), whic they hope to place by 2/99. If the public place does not take then the c is convertible into common. Im working through the conversion and , frankly, I dont understand it because it seems to convert into less value common than $10. I assumed a 30:1 reverse which equates the .10 per share current price into $3. The conversion ratio is $10/$3x130% or 2.56 shares. 2.56 x$3 is only $7.68 so why would anyone convert? Whatever price you plug into the common you still come up with about $7.68 worthof common for a $10 face prefferred! Don't understand it and have a call in to the placer Security Capital (212-339-2024). Also, went back into old news and discovered that the underwriter of the oriiginal offerring was State Street Capital (not the famous bank) which was investigated by Congress for ties to the mob. As a result, their underwritings tanked, including CCWW. CCWW seems not to have been charged or accused of anything other then poor judgement in picking these guys. Check old Business Weeks for full story in summer 1996. Also, havent yet fully worked out what the dilution will be to common s/h if the warrants and preferreds convert. Im having difficulty because of the reverse. If I take the reverse into acoount it appears that the dilution could be 2/3 (ie current s/h keep 1/3/of the company). Then again, without the new money its curtains so i guess 1/3 of something is worth more than all of nothing. I called Security to get some answers to my q's. When I hear Ill post. In meantime, feel free to call and get your own book and help me understtand if Ive read it correctly. Thanks. Im still hopeful this is positive.

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