Rick,
Any comment on the financing deal? My investment banker is telling me that the selling shareholders are in a position to short the stock, and buy it all back at around $2 by October '97. I have not yet personally investigated, but he claims that this is a spiral financing - that really can hurt current shareholders. Strategy: Those doing the financing buy lots of shares, short it aggressively when it goes over $7 and then buy it all back at prices lower than current market value (given their rights in the financing agreement, i.e. fair market value is $6 for example, and they have rights to buy at a substantial discount. You know anything about this? Of course, anyone short in light of a major confirmed sales contract is caught with their pants down and then has to cover (which I hope is what is happening now, which is my guess [and hope since I am long the stock since January '95] given the high and sudden volume).
Name of Selling Shareholder:
Capital Ventures International(2) 1,800,000(3)
Nelson Partners(2)(4) 300,000(3)
Olympus Securities, Ltd.(2)(4) 300,000(3)
CC Investments, LDC.(2) 600,000(3)
Richard L. Apel 190,551(5)
(1) Assumes the sale of all Offered Shares.
(2) Pursuant to the Securities Purchase Agreement, dated April 9, 1997,among the Company and Capital Ventures International, Nelson Partners, Olympus Securities, Ltd., CC Investments, LDC. (collectively, the "Investors"), the Investors purchased an aggregate of $5,000,000 principal amount of Debentures,
which are convertible upon approval of the Company Stockholders into 5,000 shares of Preferred Stock. The Debentures (or shares of Preferred Stock) are convertible into Shares of Common Stock and Warrants (the "Warrants") to acquire a number of shares of Common Stock equal to up to forty percent (40%) of the number of shares of Common Stock issuable upon conversion of each Debenture and share of Preferred Stock.
sec.gov |
