The company filed an 8K this evening detailing the terms of the merger. It looks like Tanner's shareholders have been issued the equivalent of approximately 7 million ROTI shares (assuming all shares of Series E preferred stock issued to Tanner's holders will be converted into ROTI.) I'm quite impressed with that. The percentage stake that Tanner's holders have in ROTI is 50.1% (pretty convenient, eh?) Bill told T 6.5 million, which is the number of shares being set aside for Tanner's holders---apparently, they assume that not all of the Series E shares will be converted anytime soon--and for that matter, the conversion option is restricted for the next six months anyway!
What else do we need to be concerned with? Well, there's the matter of the 6 million dollar investment. Harvest has confirmed that this money has come from individuals who are associated with the Series B preferred shareholder. The remaining 4 million which has not already been provided will be paid as follows:
1 million when a preliminary proxy is filed that proposes increasing the total authorized shares of the company to 100 million, among other things.
1 million when the definitive proxy is filed.
2 million when the registration statement for the Series D preferred shares is filed. The investors will exchange their Series B and C preferred shares for over 9,000 shares of Series D preferred shares.
Okay, Mr. Street, if you talk to Tim Robinson, please ask him the following:
What are the terms of the Series D preferred shares that will be issued to the 6MM investors? (This is the only missing piece of information that we need in order to truly see the value of our ROTI holdings)
When does he expect that the preliminary proxy will be filed? The 8K said "early 1999"; They need that money ASAP to build restaurants and start building a profitable enterprise.
All told, I am quite pleased with what I see so far. As long as the terms of the Series D preferred are reasonable, I'm quite confident that ROTI presents an outstanding investment opportunity.
As always, I look forward to everyone else's comments! |
