"Netmaster Group Inc.
Company Description:
CAPITALIZATION
after the issuance of 2,000,000 Ser. A Conv. Pfd. shs. in connection with the acquisition of echoMEDIA, Inc. Aug. 6, 1997 and the sale of 3,000,000 Ser. B Conv. Pfd. shs. Sept. 22, 1997
LONG TERM DEBT-
None.
STOCK- Auth. Shs. Outstg. Shs.
Preferred $0.01 par 50,000,000
Ser. A Conv. @2,000,000
Ser. B Conv. a3,000,000
Common $0.001 par *100,000,000 30,278,263
*Incl. shs. for conversion of Pfd. stock.
@Closely held. Ser. A Pfd. shs. are not entitled to dividends. Ser. A Pfd.shs. are entitled to $1 per sh. in liquidation. Convertible into Com. into the number of Com. shs. obtained by dividing $1 by the then lowest bid price per sh.(but not less than $0.05 per sh.) for the Com. stock during the 90 day period immediately preceding the date of conversion, which will be after the first quarter in which the company's gross revenues on an annualized basis exceed $20
million; an underwritten public offering of not less than $10 million; registration of Com. stock into which the Ser. A Pfd. shs. are convertible;
August 1, 1998 (with respect to one-half of the shs.); August 1, 1999 (with respect to the one-half of the shs.); and August 31, 1998, if on that date there
is not an effective registration statement covering all the shs. of Ser. A Pfd.stock; and upon occurrence of certain specific events.
a Closely held. Ser. B Pfd. shs. are not entitled to dividends. Convertible to Com. shs. on the basis of $1 million Ser. B Pfd. shs. are convertible into Com. at $0.25 per sh.; $1 million at $0.50 per sh.; and $1 million at $0.75 per sh."
1. I think the future of web advertising is explosive growth, especially with higher bandwidth and speed via cable modems, which will allow better video performance for the TV style ads.
2. I think NETZ is making good acquisitions, especially with SOFTBANK.
3. Undoubtedly, their revenue will increase, and probably their net income.
4. However, I got a feeling the number of common shares will go up
dramatically too, maybe to the limits of the 100,000,000 authorized.
Would that lead to a reverse split in the future?
5. The way I read the S&P info, is 2,000,000 pref. shares will soon be 14,000,000 million common shares. $1/.16(lowest bid)= 7 common per conv. preferred. 2,000,000 x 7 = 14,000,000.
6. Any more convertible preferred issued for Universal?
7. Any more convertible preferred issued for Softbank?
8. Any more convertible preferred issued for Meatchums Auto-Trak Business?
9. Any convertible preferred issued to just plain f--k the common holders more?
I think the last quarter of 97 could qualify as the quarter NETZ made
$20,000,000 on an annualized basis, because the last press release said the Softbank deal closed Dec. 31, 1997, with combined NETZ rev. of 7 million for Dec. 97 alone.
If so .16 is the bid to be used to calculate the conversion ratio.
Anyway, with all the investment opportunities available, why put up with this potential dilution. When Burgess says he has 1,200,000 shares, is it common, or preferred convertible into 8,400,000 million common? Will Burgess be happy with 1.2 mill commons at .16 cents (soon to be ) ;-)
Hmmmmmm.......
Joe FNTN
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