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Non-Tech : J.B. Oxford
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To: Anthony@Pacific who wrote (829)2/7/1999 10:35:00 PM
From: Sir Auric Goldfinger  Read Replies (1) of 2220
 
Didja see this? Massive dilution, no tight float here:"NOTE 3. CONVERTIBLE NOTES

In June 1998, the Company completed the sale of newly issued 9% Secured
Convertible Notes in the principal amount of $2.0 million due December 31, 1999.
The notes are convertible into the Company's $0.01 par value common stock (the
"Common Stock")at a rate of $0.70 per share. The notes will be converted into a
new issue of voting preferred stock of the Company if such new issue is approved
by the Company's shareholders. The new preferred stock will be convertible into
Common Stock on the same terms as newly issued 9% Secured Convertible Notes.
In conjunction with the above transaction, the purchasers of the newly
issued 9% Secured Convertible Notes and another investor also acquired
approximately $3.9 million in outstanding principal amount of the Company's 9%
Senior Secured Convertible Notes. The Company agreed to reduce the conversion
ratio from $1.00 to $0.70 per share of the Company's Common Stock for the entire
$4,421,311 of outstanding 9% Senior Secured Convertible Notes. The maturity
date of the notes was extended to December 31, 1999, and they are immediately
convertible into common shares.
The Company incurred a non-cash interest charge of $560,000 in the second
quarter of 1998 as a result of the discount conversion feature on the debt
instruments discussed above. The discount is based on the difference of the
conversion ratio to the fair value of the underlying Common Stock after
applying certain discounts that management believes are appropriate under
the circumstances. "
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