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Technology Stocks : ocom breakthrough technology
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To: telephonics who wrote (941)6/17/1999 11:46:00 PM
From: Q.  Read Replies (2) of 994
 
telephonics, I think you are mistaken.

Here's how the arithmetic works on the balance sheet:

When a company raises N dollars of cash by selling equity, that raises its shareholders equity, and its net tangible assets, by N dollars.

If the co. then uses some of that cash to pay off debt, that reduces the assets (by reducing the cash), but it also reduces the liabilities, so that the difference assets minus liabilities is unaffected. That means that the shareholders equity, and the net tangible assets, are unaffected. (Shareholders equity is defined as assets minus liabilities.)

The co. has not issued a news release to give details of the offering, so I don't know how much cash they netted, but unless they sold less than they originally expected, they will be able to qualify to keep their small cap market listing.

John
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