or, is this right?
From Labrador's post #2607
"FORT LAUDERDALE, Fla., Feb 3 ,1999 -- Imaging Diagnostic Systems, Inc. (OTC Bulletin Board: IMDS) announced today that its Officers and Directors have individually agreed to sell a portion of their personal shares of the Company's common stock to fund the Company's immediate cash requirements. All proceeds of the sales will go directly to the Company.
According to Linda Grable, President and director of the Company, "With the recent approval from the FDA to continue the clinical studies at Nassau County Medical Center the Company will incur additional expenses. The willingness of management to fund the Company from the sale of their personal shares shows the deep level of commitment, dedication and confidence that management has in the Company and its future".
But to the INFORMED shareholder who reads the IMDS releases with total
skepticism looking for loopholes.
In February 1999, the Company's Board of Director voted to compensate Messrs. Grable, Schwartz and Ms. Grable (the "Founders") for the shares they sold on behalf of the Company due to the following financial loss. incurred by the Founders.
1. The Founders will have to pay income tax of approximately 18% on the money received from the sale of the shares without having received any personal benefit from the sales,
2. The Founders have reduced their percentage ownership in the company by the number of shares that have been sold, and
3. The Founders will loose the tax benefit of having held the
their shares for more than 2 years.
In order to make the founders whole the Company will replace the shares sold by the Founders as follows;
1. A share for share replacement of the shares sold,
2. Shares equaling 18% of the money provided to the Company based on the 5-day average closing price of the stock preceding the date the funds were transferred to the Company to recover the tax ramifications,
3. Shares equaling 10% of the money provided to the Company based on the 5-day average closing price of the stock preceding the date the funds were transferred to the Company to cover the difference in tax bracket (28% - 18%) that will occur through sale of shares not held for 2 years, and
4. Shares equaling 10% of the money provided to the Company based on the 5-day average closing price of the stock proceeding the date the funds were transferred to the Company to as an incentive to sell the free-trading shares.
No shares have been issued to date.
IS IT ANY WONDER WHY SO MANY PEOPLE QUESTION
MANAGEMENT AND THEIR INTENTIONS?
DOES ANYONE REALLY BELIEVE THAT THE ABOVE PRESS RELEASE
WAS A FAIR REPRESENTATION OF THE EVENT?" |
