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Biotech / Medical : MTEN - expected 1000% revenue increase in 97
MTEN 2.549-11.9%Nov 4 3:55 PM EST
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To: Tom Hofmann who wrote (173)10/9/1997 2:39:00 PM
From: Knowles   of 279
 
Tom:
in reply to what the resolution of the Reg-S means.
1. NO MORE DILUTION: the way the deal was restructured, management bought out the current Reg-S holders and put a floor of $1/share on the shares acquired and tied those shares up for one year. The Company also raised additional capital to maintain adequate working cap needs...SIGNIFYING A POTENTIAL CONTRACT I WOULD GUESS (you got to have money in the bank to manufacture and ship product!!!).

Can not emphasize enough that the resolution of the REG-S is huge for existing as well as potential shareholders. As long as the REG-S was in existance there was the potential for unlimited dilution as the holders converted their loan from $ to shares.

EXAMPLE
The holder(s) of the loaned the company $6mm a year ago when the the stock was ~$3.00/share. If the holder(s) converted the loan immediatly, they would own ~2.0mm shares (6mm/3.00=2). As the stock drifted lower (probably due to the Reg S holder quickly converting) their share ownership increased. (@$2.00/share converted would equal 3.0mm shares). You get the point. Therefore, my assumption, the holders of the REG S were actually incented to SHORT the stock so as to garner more shares and eventually control over the company.

Now this is no longer a possibility, this stock should begin to perform in line with its opportunities!!!
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