Ross:
Your calculations appear fairly accurate, with a couple of exceptions and/or observations.
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"Dilution....$4,800,000 / $5,000 = 960 notes x 9,090 share = 8,726,400 shares..."
"...Potential dilution....960 notes x 4,545 shares = 4,363,200
Potential additional cash....4,363,200 shares x $0.66 = $2,879,712
Capital stock as of Feb 28, 1998......27,332,359 shares
Convertible notes......................8,726,400 shares
Subtotal..............................36,058,759 shares
Convert. notes warrants................4,363,200 shares
Subtotal..............................40,421,929 shares
Outstanding options....................2,997,250 shares
Outstanding warrants...................5,111,566 shares
Total.................................48,530,775 shares"
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Please note: Add 10% to the number of converted shares (ie. 8,726,400 + 872,640) for a subtotal of 41,294,599 shares IF ALL NOTES ARE VOLUNTARILY CONVERTED WITHIN THE FIRST SIX MONTHS. (If all were converted in the second six months, add 5% instead of 10%.) If voluntary conversion does not occur within year one, then eliminate the warrants as well as the above premiums. (Obviously, this is a tiny, even unacceptable upside compared to seeing the far higher share price during this period which we all want.)
On the other hand, almost none of the Outstanding Options are in the money, even at the $1.21 force-out level -- by far the majority are in the $2 to $5 range. More so, most of the Outstanding warrants (ie. not counting anything to do with this issue) have expired (especially the more than 2 million at $4.95 which expired on June 23, 1998 ) or they are well out of the money. Therefore, I suggest your fully diluted total should be closer to between 42 and 43 million.
I'll try to get an accurate number soon.
I hope this helps.
Greg |
