FAMH - FIRAMADA Staffing Services Message Board

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Microcap & Penny Stocks : FAMH - FIRAMADA Staffing Services

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To: Eamons who wrote (2715)	2/5/1998 9:51:00 AM
From: Brad	Read Replies (2) of 27968

Hi Stu! Keep in mind that I have not read the agreement between FAMH and the finance facility, so this is just my speculation. Regarding your first question (post #2715)... ¯My question is: What's the difference between this type of financing and simply selling this bank new restricted shares with the option to buy them back (at the original price). Plus giving the bank interest for the privilege?® My Opinion: I see very little difference. It's essentially the same thing. Your second concern... ¯In this case it looks like the collateral will come out of the shareholders pockets in the form of dilution.® My Opinion: "Dilution" by definition means "to weaken." Issuing shares that are restricted for a year does not affect the float until the restriction expires. So the strength of the share price (supply vs demand) is not necessarily affected. If the company grows and and performs favorably, the share price should continue to improve. That is the key element that allows this opportunity to work. Furthermore, these would not have to be "issued shares with a restriction." They could simply be warrants. A warrant would just give the bank the right to purchase securities at a fixed price within a fixed time span. Under the right circumstances, the shares would never have to be issued. Again, I am not privy to all the details, so I don't know for a fact that this is what is going on. It is just speculation on my part. Best wishes, Brad

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