Ram: I'll do my best -- might have to wait on a couple of points 'til I can double-check some notes at work.
On the Biotrack, 516: Based on the sales history and the guaranteed five-year contract from Boehringer, folks at the company are anticipating $1 million in operating profit in the first full year. That's based on current marketing in Germany and Japan mainly. With a little money and motivation, it could be more, but I'm already dreaming enough by my stake in this company already.
The total value of all conversion notes is about $4 million. Holders have an option of converting to stock or return of loan at 9 percent. The loans were made 2-2 1/2 years ago. Dilution is minimized by a convuluted conversion process that will allow the PDTI to buy back a portion of each conversion, so that the maximum amount registered is $2 million. By the way, PDTI is offering conversion estimating the value at $3 per share, so unless someone is really sold on the company's future, they'll take the loan option and run -- another reason I don't believe there's a lot of dilution coming.
On the final note, there are at least two people I know with a lot more involved than I, who are firmly convinced (or in denial) that the subscription will be filled. Their reasoning: when all the converting, warranting and such is done, there will still be fewer than 10 million shares of PDTK, and the subscriber will have a large chunk of that. But the company will have the Biotrak, Stat-K and about $4 million in cash. Factoring in the good ol' 20-1 PE, and .65 per warrant looks like a bargain.
My belief: if the company makes the subscription, those who would convert to cash will opt for the stock (even at its inflated level). If the subscription isn't made, there's a run for the door. By the end of February, we'll know either way.
As one of the 30 original investors, I've got a lot to gain by seeing this subscription through. We shall see.
Best of luck,
Chick in NC |
