Steve,
Thanks for the reply. Here are some stats from the Annual Meeting notice.
As of 4/3/98 there were 11,919,163 shares of common stock outstanding. This is the same amount noted on the stock information section of SI. There were 7,601,193 shares for future issuance (stock options, incentives, employee purchase). However, there were 440 shares of series B Preferred stock and 1,100 shares of series C preferred stock (value of $10,000/share, total value of $11,000,000). As a result, a total of 2,623,617(series B) + 2,650,000 (series C) shares were required to be taken out of the pool in case the preferred stock is converted. This left 479,644 shares for future issuance and was the rationale for increasing the total authorized shares to 40,000,000.
I am glad you knew about the series B specifics. I don't know the share price.
The series C is convertible after June 20, 1998 - and in the notice it looks like the holders are limited to converting 15%/month if the share price is <$8.25 and 30%/month if the share price is between $8.25 and $11.00.
So in summary, it looks like even if every possible share of preferred stock is converted at today's prices, it might add about an additional 2.5 million shares of common stock being issued. That is only about a 20% increase in the float. Since the increase in shares with each dollar below current prices is linear - there could be a point (penny stock range) where holders of the preferred stock may be majority shareholders, but there would be plenty of advanced notice.
Does that sound right to you?
Thanks,
George D. |
