Thank you for now doing some reading and expressing an informed opinion.
One minor correction to your statement: >> I presume everyone knows that the Chaiorman[sic] gets paid $360,000 annually and got on top of it a grant of 5 MM shares. I also presume everyone knows that the "incentive option plan" was increased from 10 MM shares to 17.5 Mm shares, thus a total of 22 MM new shares. <<
As the option plan was increased from 10 million shares - previously registered - to 17.5 million, your total amount of increase should state 12.5 million, not 22 million.
I hope you won't mind a few questions and I do appreciate your answers.
>> The PP is floorless alright, but it is only for $2 MM. I have doubts (but not certainty) that this will suffice <<
What is not yet known is, since the 12/31/98 date of the 10K, whether any revenue has negated the need to further utilize monies from the PP, either totally or in part. IF there is no need or only minimal need to use more of the PP funding, what would you say the outlook or impact is then?
>> Since I could not find a registration statement (typically an S-3) relative to this floorless, I have to assume that some of the recent decline is due to simply selling short against the block without converting. <<
Would this, that follows, have anything to do with the fact that these shares are not yet registered? What do you think of the idea that it may be better to delay the registration and pay the 2 1/2% damage amount (the "gotcha" clause Sword brought to the attention of the thread)? Do you consider this to be a beneficial possibility and why or why not?
(e) In the event that (i) the Registration Statement to be filed by the Company pursuant to Section 3(a) above is not filed with the Commission on or before April 15, 1999, (ii) the Registration Statement is not declared effective by the Commission within ninety (90) days from the filing date, or (iii) the Registration Statement is not maintained as effective by the Company for the period set forth in Section 3(b) above (each a "Registration Default") then the Company will provide Holder (pro rated on a daily basis), as liquidated damages for such failure and not as a penalty, at the election of the Company
either;
(A) two and one-half percent (2.5%) of the remaining principal balance of any Convertible Debenture plus the aggregate market value of shares of Common Stock issued upon conversion of any Convertible Debenture and still held by the Investor, for every month or portion thereof thereafter until the Registration Statement has been filed, or declared effective in the event of late effectiveness (in case of clause (ii) above) or in the case of lapsed effectiveness (in the case of clause (iii) above) (regardless of whether one or more such Registration Defaults are then in existence) until the Registration Statement has been declared effective;
or
(B) an adjustment to the Conversion Price of all unconverted Convertible Debentures by decreasing the percentage of the Market Price by two and one-half percent (2.5%) for each month or portion thereof thereafter until such Registration Default is cured. Such payment of the liquidated damages shall be made to the Holder in cash (if the cash option is elected by the Company), within five (5) calendar days of demand, provided, however, that the payment of such liquidated damages shall not relieve the Company from its obligations to register the Registrable Securities pursuant to this Section. The market value of the Common Stock for this purpose shall be the closing price (or last trade, if so reported) on the Principal Market for each day during such Registration Default. (not the bid, as you stated) |
