Ok I am going to try and explain the news release line by line.
**********************************************************************
(BSNS WIRE) Midland Inc. Announces a 50% Preferred 'A' Stock Dividend Midland Inc. Announces a 50% Preferred 'A' Stock Dividend
Explaination: This is a dividend to shareholders
Definition: dividend ... A share of a company's net profits distributed by the company to a class of its stockholders. The dividend is paid in a fixed amount for each share of stock held. Although most companies make quarterly payments in cash (checks), dividends also may be in the form of property, scrip, or stock. Unlike interest on a debt, dividends must be voted on by the company's directors before each payment. A number of financial publications, including Moody's Dividend Record, provide investors with information on the amounts and dates of past and current dividend payments.
Business Editors
DALLAS--(BUSINESS WIRE)--May 18, 1998--Daniel W. Fisher, CEO of Midland Inc. (OTC BB:MIDL), today announces the following two items, both of which are felt to be beneficial to the company and the shareholders.
Explaination: The company is in touch with its shareholders and is willing to reward the investors and complicate the heck out of the day traders because they do not know which one to run.
First, there will be a dividend on the publicly traded series A preferred stock (MIDLP). For every two shares of existing preferred
series A stock held by shareholders of record on the close of the
business day, May 29, 1998, a dividend of one share of preferred
will be issued.
Explaination: Shareholders of record is all shareholders that own MIDLP at the close of the business day Fridy May 29, 1998. If you sell before them you do not get the dividend. This will include every shareholder that has the MIDLP whether is street name or certificate form. It makes no difference the company will get a list of shareholders.
This dividend will automatically convert to 35 shares of common stock on Oct. 1, 1999, whereas the existing preferred A will automatically convert on Oct. 1, 1998.
Explaination: Now the exisitng prefer and the perferred that is bought up to May 29, 1998 will convert on Oct 1, 1998 regardless of the dividend. The conversion will be 35 shares in your account for every P you hold on that date of the P if you have not sold it off.
Whereas the new dividend will remain in your account after the Oct 1, 1998 till it converts in Oct, 1.1999 if you still own it. The legend on the stock will show up as to different MIDLPs in your account.
This 50% stock dividend is being taken from existing treasury so no additional dilution to the existing shares will occur.
Explaination: Now this is a key to the whole 9 yards there are 117K issued and no other P will be issued which basically dries up the P in the treasury. Now This also has another interesting point if someone is short on the P say 10K their short position will increase to 15K. It works both ways. Now I could be wrong but that Is my understanding on this item. So if some is looking for stock they can't get it from the company.
Management feels this is a fair dividend for the shareholders who have supported Midland Inc. through its early stages of development.
Explaination: self explainitory
The second matter is a reduction of the exercise price of the
Midland warrants (MIDLW) from $1.00 to $0.50.
Explaination: this equalizes the advantage of the warrants over the common and somewhat balances the two. At .25 the common is worth .75 because of this reduction the warrants are like buying the common and thus kills the hedging. This to me is a 50% saving too because we were going to have to pay $1.00 for a share of common now if is going to be .50 which is a 50% saving. They are cleaning up and straighten out the stock structure.
This brings the exercise price of the warrants in line with the common. All other conditions concerning the warrants will not be effected.
Explaination: The warrants have a target price of $2.50 and the same 10 days and 30 day notice. HOWEVER the next senetence is a key.
As soon as the registration statement registering the common stock underlying the warrants becomes effective, the warrants may be exercised.
Explaination: NOW this means they cannot recall even if the common goes above the target price. THERE CAN BE NO RECALL. PERIOD. Until this registration statement comes back they can not recall NOR can they be exercised. PLUS if this stock is setting at $10.00 when registration comes back the warrants should be at $9.50 and the P at $350.00. So once the news release comes out that the registration is complete you can buy a share of $10 stock for $.50.
The company anticipates concluding the necessary SEC filings as
soon as possible and has begun the necessary regulatory process.
Explaination: Yep they got a lot to do now more than ever so it is going to take a while. Time is the key for they have a lot to file.
The company has concluded the field work on its audit so as to move forward with its 10-K filing, which should occur sometime next week.
Explaination: We should see the shareholder call for the shareholder meeting at this time.
NOw this is a interesting turn of events the triology is now equal ... Period. There is no advantage in one of the markets ...
GB |
