BDE... One more reason for the stock to be/have been shorted, at least in the short term.
From recent s-3. The cheaper the stock price, the more stock the buyer receives.
Also a better discount over prevailing share price.
Anyone ask how many shares were sold with this round of financing or if it is completed?
If not, we may see further downward pressure. At least the stock behaved
appropriately with todays news.
All IMHO
x
OUR SALE OF SHARES AT A PRICE BELOW THE MARKET PRICE OF OUR COMMON STOCK WILL
HAVE A DILUTIVE IMPACT ON OUR STOCKHOLDERS.
We have entered into a securities purchase agreement with an investor that
allows us to sell to the investor up to $6,000,000 worth of shares of our common
stock at a discount to the then-prevailing market price of our common stock. The
table below sets forth percentages of our common stock the investor would own if
we elected to sell the entire $6,000,000 worth of stock under the purchase
agreement. The percentages are based on our closing share price of $6.375 on
June 25, 1999, and on assumed prices of $4.78 and $3.71, which prices represent
a 25% and 42% decline, respectively, in our June 25, 1999 closing share price.
The percentages are also based on the number of shares of common stock
outstanding on June 25, 1999. We cannot issue to the investor more than 19.99%
of our common stock that was outstanding at the time we entered into the
securities purchase agreement, which equals 13.8% of our common stock
outstanding on June 25, 1999.
Page 11
Percentage Percentage of
Discount to Assumed Outstanding
Market Price Market Price Common Stock
------------ ------------ ------------
0% $ 6.38 8.3%
25% $ 4.78 10.8%
42% $ 3.71 13.8%
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