Looks like we've both made calculation errors. :o)
According to their web site, Zi has arranged several private placements which include the issuance of warrants. They are not shares outstanding today, of course (unless they have been converted). But, in terms of computing future earnings per share I believe you should use all the shares potentially outstanding.
This number is sometimes different from the SEC's mandated "fully diluted" share count. Under SEC rules if you are losing money you don't assume conversion of warrants or convertibles. But obviously if Zi is successful these warrants will be converted. And EPS will be lower than if you assume 30MM shares o/s.
I cannot tell how many warrants have been exercised. Until recently they were not substantially in the money. Now, of course, they are. But I believe the usual practice is to wait with your warrants until close to expiration. That way you get maximum potential benefit (if you believe in the company) with minimum risk.
The way I read the press release below dated March 29, is that 2.7 million shares were issued, and an additional 2.7 million warrants. (In the calculation I made I have double counted the shares issued in March. Of course they are included in the June 30 numbers).
There have been other private placements. I don't think all are listed in their press releases, which only go back to 1997.
Best regards,
JS
zicorp.com
Zi CORPORATION
PRESS RELEASE
For immediate release (Calgary, Alberta)
March 29, 1999
ZI CORPORATION ANNOUNCES PRIVATE PLACEMENTS
Zi Corporation (TSE: ZIC; NASDAQ: ZICA) announces that it has received
subscriptions for private placements in the amount of approximately
CAD$3.4 million. Pursuant to the private placements, Zi Corporation will
issue Units at US$1.25 per Unit. Each Unit consists of one common share
and one common share purchase warrant, where one warrant is exercisable
into one further common share upon payment of US$1.75 per share for a
period of 36 months from the date of closing. Proceeds from the private
placements will be used by Zi Corporation to finance ongoing operations.
The securities described in this announcement have not been registered
under the United States Securities Act of 1933, as amended (the "1933
Act"), or the securities laws of any state of the United States. Such
securities may not be offered or sold in the United States or to a U.S.
person, as that term is defined in Regulation S under the 1933 Act, nor may
the warrants be exercised in the United States or by or on behalf of a U.S.
person, absent registration under the 1933 Act and applicable state
securities laws or the availability of an applicable exemption from such
registration.
Zi Corporation?s corporate goal is to make modern electronic technology
more accessible to people in a way that is consistent with their languages
and culture. By connecting technology to language, Zi Corporation brings
language processing to the mass market for devices such as mobile phones,
set-top boxes, computers and other information appliances.
NEITHER THE ALBERTA STOCK EXCHANGE NOR NASDAQ HAVE
APPROVED OR DISAPPROVED OF THE INFORMATION CONTAINED
HEREIN.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Zi Corporation
Carol Kim
Manager, Investor/Media Relations
(403) 233-8875
website: zicorp.com |
