To the extent that the trading price of Common Stock is lower than $6.94 per share (or $6.88 per share for the Series B shares purchased on July 27,1998) at the time of any conversion of the currently outstanding shares of Series B Preferred Stock, the number of shares of Common Stock issuable upon such conversion will increase.
I ain't no financial wizard but I assume this means what it says: any drop below $6.88 will result increase number shares released thereby diluting the stock. Let's say they had 10,000,000 shares, at $3.44 a share they will get 20,000,000 shares and at $1.22 they will receive 40,000,000 shares. I guess this was how they protected themselves in the case of a price collapse: the more it drops the more shares they get. Now, the more shares they get, the more diluted the stock gets, the farther it drops in price, and the more shares they get. You can also bet that they shorted the stock themselves knowing that it would be diluted them pummeled by the conversions. This reminds me of SYCR, a penny stock I predicted would crash at $3.00, you can buy it now under a dime but it's been as low as 4 cents. They had the same deal as Master Financial Guru Del Yocam put together here.
PLEASE correct me if I'm wrong about this. If I'm right, this could be the reason Del and Kathy left. Are they still in the country? I hope we're not looking at a John Delorian situation here and they've left for Argentina or some such thing -- OK, that's a bit carried away but hey, they aren't telling you guys. Personally, I DON'T CARE! I'm now using the fully operational, limited time C++Builder product I got as a coffee coaster, my AOL CDs clashed with the decor!!! |
