There is a very good possibility the company could have been selling these shares in the open market. 4 million shares via escrow!!!
NOTE 2: PRIVATE PLACEMENT; EQUITY FINANCING
I got this off of their 10Q filed last November. I don't know how to interpet it. The reason I am posting it, I am giving the company the benefit of the doubt that if they were selling shares into the Market via LCAP, this is what they were selling and they were doing it for financing purposes or to settle up with the preferreds. I don't know!!! It's just speculation on my part and everyone else's part until we talk to management.
The Company issued a Private Placement Memorandum pursuant to
Regulation D, Rule 505 during the first quarter (and revised on April 9, 1996
and on August 23, 1996) to sell an aggregate of 4,000,000 shares of restricted
common stock for a total of $1,000,000. During the three month period ended
September 30, 1997, a total of $108,360 was raised pursuant to the Private
Placement. The total amount raised pursuant to the Private Placement for the
nine month period ended September 30, 1997 was $317,999.
NOTE 3: CONVERTIBLE SECURED DEBENTURES
On April 9, 1997, the Company sold $600,000 in aggregate principal
amount of 10% Convertible Debentures due April 30, 1999 under Regulation S.
Sales commissions of 15% were paid. The Company placed 4,000,000 shares of
restricted stock in escrow as security. Under the original terms of their
issuance, the Series B Convertible Debentures are convertible into common stock
at the lower of $.186 per share or 62% of the closing bid price of the common
stock averaged over the five days prior to conversion. The issuance and sale of
the Series B Convertible Debentures was intended to comply with Regulation S of
the Securities Act.
Based in part on the advice of outside legal counsel, the Company
believes that the validity of the convertibility of the Debentures is open to
some question and the Company has been sued by the Holders of the Debentures to
force conversion. The Company is defending its position and is, at this time,
uncertain as to the outcome of these proceedings. (See Part II, Item 1, "Legal
Proceedings.)
The Company has booked the Debentures as long-term debt. Should
conversion occur, there would be a corresponding entry in stockholders' equity,
which would involve significant dilution of current shareholders. 4,000,000
shares of the Company's restricted common stock has been placed in escrow to
cover such conversion.
I'm attempting to put a positive spin on this whole scenario because the obvious; I have a significant investment in GLCP, like many of you I don't want it to tank tomorrow either.
If the news is truly going to come out this week and it is very positive news, then we all have nothing to worry about.
Thanks everyone for bringing this to my attention.
Good Night!!!
P.S This was also pulled off of the 10Q
ITEM 4 - SUBMISSION OF MATTER TO VOTE OF SECURITY HOLDERS
On October 27, 1997, the Company issued a Proxy Statement to
shareholders to vote at a Special Meeting of Shareholders to be held on December
5, 1997. The purpose of this meeting is to vote two (2) matters: (1) the sale of
the Company's GAM Properties, Inc. subsidiary to Golden Age Homes, Inc.; and (2)
to amend the Company's Articles of Incorporation to effect the increase of its
authorized common stock to 100,000,000 shares. |
