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Microcap & Penny Stocks : TVIN,will be awarded a contract with NASA.@.14cents
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To: son kien do who started this subject12/5/2003 1:35:22 PM
From: PJr  Read Replies (1) of 853
 
CAT, Gordon, anyone ....

I'm afraid I can't come to grips with what has happened here. I haven't seen anyone yet address the tax exempt dividend that was part of this "poison pill." Anyone have an explanation of what this means?

I'd like to use round numbers in this example just so the fractions are easier to manage. Let's assume that someone has 100k shares. If I understand it, this entitles the holder of these common shares the right to 1,000 preferred shares (one one-hundredth of a preferred share for each common share owned).

Here's where I get cloudy ... Does this mean that the holder has the right to buy these 1,000 preferred shares at the price of $6.00 per share? Can they be bought at any time prior to the expiration? Are there advantages to buying them "sooner" rather than "later"? If the expiration date occurs without a purchase of these preferred shares, are there tax consequences? Is there a write-off for a loss? I guess they could be considered tangible assets, no? They are a dividend ...

I'm not really seeking tax advice, I'm just curious as to how these preferred shares come into play. Do they come into play ONLY when there is acquisition activity? I know that they would be beneficial in the event of a takeover or dissolution but is there value other than that? If anyone is familiar with similar offerings by companies with which they have been involved, I'd be interested in hearing about it.

Pat
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