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Non-Tech : Bill Wexler's Dog Pound
REFR 1.825+5.5%2:24 PM EST
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To: TRIIBoy who wrote (1718)7/1/1999 10:35:00 PM
From: David  Read Replies (2) of 10293
 
It will be clear very quickly which way the stock goes tomorrow.

As for your point about high dilution if the stock price is under $8.71, the release indicates that both of two conditions have to be satisfied:

"Terms of the transaction include a provision that could result in a one-time issuance of additional warrant shares if the registration statement is not effective by July 23, 1999 and the market price of the common stock is less than $8.71 on the date of effectiveness. The company intends to promptly file a registration statement covering the shares of common stock."

In other words, IDX is on the hook to get the registration statement effective in three weeks, which they have every reason to do, and state they intend to do. So that potential for additional dilution should only be considered a provision that gives IDX an incentive to act quickly and cut down on the market risk of the organizations providing the new cash.

We also don't know the terms of the warrants, such as how they may be called by the company. Finally, since IDX will have in the neighborhood of $10M free cash and is running at breakeven, you can bet there is something worthwhile going on that they will be using that cash for, and that may also be public fairly soon -- which can help the stock price.
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