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Microcap & Penny Stocks : MTCI...@.75 joining the big guys
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To: Aidan Harland who wrote (2749)4/2/1997 7:37:00 PM
From: TLWatson59   of 2834
 
With reference to Reg "S" debentures most have both a fixed conversion price and and alternative pricing structure based on a discount price ranging from 65% to 70% of the average closing bid price for the five day period preceeding conversion and sale. Thus for example if the average closing bid price for the past 5 days was 1/16 and the stock were converted and sold tomorrow the cost to the seller would be .04375 per share at the 70% discount. If sold on the open market at 1/16 this would result in an approximate profit of 42%.

As things stand now, first call on assets would go to the UK if their laws are the same as ours with respect to unpaid taxes. The next call on corporate assets belongs to the debenture holders. It is my understanding that there are no other outstanding debt instruments or liens.

If this is so and the company can work out a restructured payout of taxes and payable they may be able to borrow under usual bank terms pledging assets as collateral. This in my opinion is the longest of long shots but still a possiblity. I hope this does not leave more confused but its the best way that I can explain this situation.

IMHO it was this structuring that invited unscrupulous illegal short selling in this stock. The debenture holders possibly in collusion with a number of MM's sold stock they did not own but intended to replace those shares they would get upon conversion of the debentures after driving the market price down.

TLW59

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