DILUTION
Common stockholders will suffer significant dilution in the event thatany of I-Link's outstanding convertible securities, including outstanding shares of Class C Preferred Stock, Series F Preferred Stock and Series M Preferred Stock, warrants and options are converted by the holders thereof. See "Description of Securities." Additional dilution may result in the event of the exercise of warrants and options, including options granted pursuant to I-Link's
stock option and purchase plans and employment agreements.
Currently the following securities are outstanding, which may beconverted to, or exercised for, shares of common stock. See also
"Risk Factors -
Future Issuances of Stock by I-Link; Potential Anti-Takeover Effect."
- 44,051 shares of Class C Preferred Stock, convertible into to
1,057,224 shares of common stock
- 960 shares of Series F Preferred Stock convertible into 4,722,085
shares of common stock
- 4,400 shares of Series M Preferred Stock, convertible into 4,400,000
shares of common stock
- $7,768,000 of Winter Harbor Convertible Debt, convertible into
3,107,200 shares of common stock
- Winter Harbor Warrants, exercisable for 28,540,000 shares of common
stock (includes the issuance of 9,900,000 warrants assuming the
non-repayment of Bridge Loan debt by March 15, 1999)
- Winter Harbor Warrants (contingent on debt conversion) exercisable
for 5,000,000 shares of common stock
- Other Options and Warrants, exercisable for 10,554,942 shares of
common stock
If all of the above securities were exercised or converted, a total of 57,757,463 shares of common stock would be issued. That number representsapproximately 305% of the current number of shares outstanding, and would represent 75.3% of the common stock outstanding after all 57,757,463 shares were issued. The potential of these underlying shares of common stock being issued and then sold into the market, or the perception that such sales may occur, may
result in a decrease in the market price of I-Link's common stock, and may make it more difficult for I-Link to receive additional equity financing.
Total currrent potential dilution is (57,757,463/.753) = 76,703,138 shares |
