DAVID SIRK's VALUE MOMENTUM PLAYS Message Board

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Microcap & Penny Stocks : DAVID SIRK's VALUE MOMENTUM PLAYS

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To: David Sirk who wrote (4038)	7/8/1999 11:47:00 PM
From: ISOMAN	Read Replies (2) of 4828

Under the conversion terms of the Debentures, the maximum number of ordinary shares which may be issued on conversion is limited to 23,900,000, representing approximately 4.6 per cent of the current issued share capital of the Company, save in certain circumstances, further details of which are set out in the paragraph titled "Maximum Dilution Provisions" set out below. That example is a FIXED CONVERTABLE Debenture. It outlines the maximum damage or dilution that the debentures can do to that stock. That is fair. A floorless Debenture is different. There is no fixed limit. That is the problem. Just think, what The investor who put up the money (Kernaghan most liikely) will be able to do if they get CLVE down into single Digits. How many shares will they get if they convert at Say 3 cents. $4 million divided by 3 cents = a very dilluted stock. If this was a good deal for CLVE shareholders, the debentures would have a fixed limit i.e. shares can be converted at $1 or shares can be converted at .50 cents. As it stands they have 5 years to convert at the average of any 5 trading days they choose. Go read up on Zeevs postings. He knows his stuff.

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