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RE: Dilution Update
So let's see, as of September 8th:
SHARES OUTSTANDING - Total shares outstanding were 135,527,455. Actually, that's only about a six percent increase from 127+ million shares out at the end of the June quarter. It would appear that very little has recently been converted.
OPTIONS - Total options granted and not expired, cancelled nor exercised were 8.4 million.
WARRANTS - Total warrants granted to purchase common shares were 49,161,328. These warrants continue to have the potential of providing additional funds, but with an average conversion price somewhere near $3 each, the EdHeads would have to offer an incredible number of their favorite freebie incentive shares to get any of these holders to convert, (about 8 or 9 additional incentive shares would have to be included with each conversion, just to get the holders to reach break even status with their investment). I'd expect they'd also have to add (at a minimum) at least one more bonus share before anyone would even consider plunking down any more serious investment cash at this point. This would all mean that (in this hypothetical scenario and pre-reverse-split), approximately 500 million shares would need to be issued if all the warrant holders were to be enticed to invest and convert. Of course this would also generate about $150 million in much needed cash.
PREFERRED STOCK - Per the most recent 10-Q, there was $39,141,300 worth of preferred stock that remained unconverted at the end of the last quarter. Using the current share price of $0.3125 as the conversion basis, this would represent 125,252,160 common shares. What's interesting here at this price level is that a mere 1/16th point move down from here means that the preferred holders would receive another 20+ million shares upon total conversion.
So, to recap:
______135,527,455___ shares outstanding
________8,400,000___ shares from options
_______49,161,328___ shares from warrants
______125,252,160___ shares from preferred
______318,340,943___ shares total dilution (if all converted)
but - that assumes a 1 for 1 warrant conversion - so a more reasonable estimate might be to add perhaps another 442 million for incentive shares if the EdHeads expect to get their hands on all that critical cash - which could bring the total to a mind boggling diluted figure of about:
760 million shares
of course we'll have to add a chunk of shares after the reverse split to cover some of SyQuest's contractual obligations.
Oh, and didn't the EdHeads say the would like to do a secondary offering next year? (Yeah, right)
Regards - Dale |
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