Hi Dave - two VERY INTERESTING articles about a company fighting back against convertible debenture holders.
Regards,
Phil
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DynaMotive Says Probe Found Evidence Of Stock Manipulation
02/01/1999
Dow Jones Business News
(Copyright (c) 1999, Dow Jones & Company, Inc.)
NEW YORK -(Dow Jones)- DynaMotive Technologies Corp. said Monday that a report it commissioned has found a pattern of trading consistent with manipulation of the company's share price.
Vancouver, B.C.-based DynaMotive (DYMTF), which trades on the Nasdaq SmallCap market, formed a special committee of the board to investigate the falling price of its stock since it entered into convertible - debenture financing in April.
DynaMotive, which develops metal-cleaning processes for the steel industry, said the report found "the price decline in DynaMotive stock does not reflect the operation of free economic forces of supply and demand."
The report also indicates that a short-selling scheme orchestrated by certain convertible-debentures holders is the most likely cause for the price decline. Short-selling involves the sale of a borrowed security with the intention of repurchasing it at a lower price. Meanwhile, an investor can exchange convertible debentures for stock at some future date.
If a stock price declines, holders of convertible debentures are entitled to a greater number of shares upon conversion.
As reported, the company in October suspended conversions of its convertible debentures in light of the significant price decline in its common shares and the concern that the decline may have resulted from market manipulation.
In response to a poll of shareholders conducted in November, representatives of over 51% of the total issued and outstanding shares of DynaMotive indicated that they wouldn't vote in favor of a resolution authorizing the issuance of additional shares to satisfy conversions of the convertible debentures.
The company submitted a final proposal to debenture holders on Jan. 15 that reflects investment returns based on the market price of common shares in effect at the time the convertible - debenture financing was secured. The company said the proposal offers an "equitable settlement" for the holders while providing protection for existing shareholders and maintaining thecCompany's long term viability.
DynaMotive said it will continue to pursue a fair and equitable settlement with convertible debenture holders but will also take "all necessary steps" to protect and vigorously defend the rights of the company's shareholders.
The company said it expects "most, if not all" of the convertible - debenture holders to accept its settlement proposal.
One of its current 23 convertible debenture holders has accepted the company's settlement offer.
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DynaMotive Announces Settlement Agreement With All Remaining CD Holders
PR Newswire, Wednesday, February 17, 1999 at 09:17
VANCOUVER, British Columbia, Feb. 17 /PRNewswire/ -- DynaMotive
Technologies Corporation (NASDAQ:DYMTF) announced today that a settlement
agreement has been reached with all of the remaining holders of the Company's
outstanding convertible debentures.
The agreement, which has been approved by the Company's Board of
Directors, includes a combination of cash payment and common shares which will
be subject to a controlled release from an escrow account. As a result of this
agreement, the Company will have completely repaid its obligations from the US
$3.8 million April, 1998 CD financing. Furthermore, all legal actions brought
against the Company by the CD holders will be dropped.
Commenting on the settlement, DynaMotive's Chairman, Richard Lin said,
"The Board is pleased that it has reached a settlement with the CD holders.
We look forward to putting this matter behind us and focusing our efforts on
continuing to make significant progress in both the BioOil and DynaPower
business units."
DynaMotive Technologies Corporation develops and commercializes
technologies that improve industrial efficiency and solve major environmental
problems. The BioOil Business Unit is commercializing a unique,
waste-to-energy technology that converts low value forest and agricultural
waste into liquid BioOil. This clean burning liquid fuel can be used as a
substitute for fossil fuels to generate "green" power. The initial focus
will be to package BioOil production technology with gas turbines and
stationary diesels in the under-20MW (megawatt) power market.
The DynaPower Business Unit markets its proprietary ultrasonic and
electrolytic cleaning systems to the wire manufacturing industry. The cost
effective technology produces exceptional surface cleanliness at high speeds
while totally eliminating the use of acids, caustics and solvents
traditionally used by the industry. Commercial systems have now been sold in
seven countries.
Forward-Looking Statement
Statements in this news release concerning the company's business outlook
or future economic performance; anticipated profitability, revenues, expenses,
or other financial items; and statements concerning assumptions made or
expectations as to any future events, conditions, performance or other
matters, are "forward-looking statements" as that term is defined under the
Federal Securities Laws.
Forward-looking statements are subject to risks, uncertainties and other
factors which could cause actual results to differ materially from those
stored in such statements. Such risks, uncertainties and factors include, but
are not limited to, changes and delays in product development plans and
schedules, customer acceptance of new products, changes in pricing or other
actions by competitors, patents owned by the Company and its competitors, and
general economic conditions, as well as other risks detailed in the Company's
filings with the Securities and Exchange Commission.
SOURCE DynaMotive Technologies Corporation
-0- 02/17/99
/CONTACT: Raymond McAllister, Director, Corporate Communications of
DynaMotive Technologies Corporation, toll free, 1-877-863-2268, or direct
line, 604-267-6009, or fax, 604-267-6005, or mcallister@dynamotive.com/
/Web site: dynamotive.com
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