***REG S Shares Discussion**
As I understand it....if the stock is above $3.50 then the REG S debentures will be converted at $3.50. $7.81 million into common at $3.50 will be 2.23 million shares. This will hit the market in April, May and so on until Sept at 335,000 shares per month with 225,000 in Oct. That is provides the stock is above $3.50. Now if the "Investors" really want to make money, they sell short before conversion to drive the stock price down. Now when the convert they get a much larger number of shares that the use to cover the short and to sell in the open market, futher depressing the stock price. There would be no pop from the short covering because it is new shares coming to market.
That is my understanding of the general scenerio. Now the question is what is the intention of the overseas "investors" in our case. It would be possible for the overseas investors, if the stock price was low enough, to become majority shareholders after conversion. However, I don't think this is the intention. The overseas shareholders did amend the terms of the original debentures and did so, apparently with a rising stock price in mind. I am presuming this because they gave up the ability to convert all at once for a lower $3.50 conversion price on the stock. This is a gut feel by me, not proof that this is why they amended the agreement. If that is the case, these holders don't appear to be interested in the typical bear raid. However, I would like to know the actual dates of conversion...not just the month so I can be prepared for a potential decrease in the stock price before hand. As stated in some of the other posts, I believe we have some time to research this further.
Comments always appreciated.
Scott |
