TheTruthseeker Report-The Strange Case of the TMOT S3
On July 20, 2000, shortly after anouncing, in an 8K, that the company
was on the brink of total collapse, Titan Motorcycle then released an
S3. An S3 is a registration statement allowing a company or its large
investors to sell shares. Many investors, however, know to be careful of
S3 filings, because the money raised doesn't go to the company! Thats
right. TMOT will get no money from this offering. So don't be fooled
into thinking that this share sale might help the company out of its
mess. It won't.
Tbis filing is allowing the investors, who only one month ago, on June
20 2000, bought the Series C Convertible Stock (and got lots of free
warrants too!), to convert it into common stock, and sell it on the open
market. Basically, this is a fire sale, they are trying to get out while
they still can.
If you look back to June 22 2000, you will find an 8K from TMOT which
describes the Series C Financing, here are some highlights:
_______________________________
ITEM 5. OTHER EVENTS.
On June 20, 2000, Titan Motorcycle Co. of America sold 650 shares of
Titan's Series C Convertible Preferred Stock and a warrant to purchase
821,053 shares of Titan's common stock to Esquire Trade & Finance Inc.
and 650 shares of Titan's Series C Convertible Preferred Stock and a
warrant to purchase 821,053 shares of Titan's common stock to Celeste
Trust Reg. in a private placement for a total of $1,300,000 in gross
proceeds to Titan.
Unless shareholder approval is obtained, the Series C Convertible
Preferred Stock and warrants are convertible at any time into a maximum
of 1,750,000 shares of Titan's common stock for Esquire and 1,750,000
shares of Titan's common stock for Celeste.
_________________________________
So, what does this mean?
Lets use Esquire Trade and Finance (ETF) as an example.
On June 20, 2000, ETF gave TMOT $650,000 and in return got the
equivalent of 2,571,053 shares of common stock (1750000 + 821053). So
ETF paid 25 cents a share for TMOT stock. (2,571,053/650,000). Well, on
June 20th, the date of the transaction, the closing price for TMOT stock
was 1.0625. So the investors got a discount of about 77% to market.
Even today, after the news that, even with the June 20 private
placement, the company is basically BK, the investors still have about a
40 cent gain. Today's close was about 65 cents.
What do you think these investors will do? The Truthseeker guess is that
at any price above 25 cents, they make money, so logically they will
dump and dump and dump some more until the price goes back above .25!
Maybe they will even give some stock to paid promoters, in return for
pumping services. Who knows for sure? Only they do, but one thing is
certain, TMOT has blown a gasket. |
