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Microcap & Penny Stocks : Netrix Corp. (NTRX) -- Ignore unavailable to you. Want to Upgrade?

To: Alan Hume who wrote (131)	2/4/2000 9:51:00 PM
From: Pete	Read Replies (2) \| Respond to of 162

Here is the exact wording taken from the filing. I believe it is dilutive since 1,000,000 shares are being offered by the company and 200,000 by a selling holder. It also looks like the Aetherworks merger will not be completed until 10/00, and if the stock price is not at least 22.50 there is a condition in the agreement to issue more shares. The current issue is being offerred at 19.75 (which explains the dive at end of day today) I don't see how any of this will help the share price near term...what am i missing? Pete AGREEMENT TO ACQUIRE AETHERWORKS On December 31, 1999 we entered into an agreement to acquire AetherWorks Corporation. The acquisition will be effected, upon closing, through the merger of AetherWorks with and into Nx1 Acquisition Corp., a wholly-owned subsidiary of ours. AetherWorks provides innovative voice and data carrier class convergence solutions for the telecommunications industry, including soft switch technology. AetherWorks focuses on the multi-protocol telecom switch featuring smart management, universal messaging and other telephony functions. We believe the combination of AetherWorks and our technologies will serve the converged markets and allow secure and seamless end-to-end interoperability while providing advanced voice services. In particular, the combination of AetherWorks and our technology enables telcos, internet service providers (ISPs), and enterprise wide area networks and local area networks (WAN/LANs) to provide a secure end-to-end solution that simplifies networking setups and expands services. The transaction was approved by the boards of directors of the three companies and by the stockholders of Nx1 Acquisition Corp. The holders of over 90% of AetherWorks' common stock have consented in writing to the merger and the remaining stockholders are expected to deliver their written consent in the near future. Holders of a majority of the AetherWorks common stock have granted proxies to us to vote their shares in favor of the merger if a stockholders meeting is required in lieu of a unanimous written consent. Under the terms of the Agreement and Plan of Merger, we will issue approximately 3.49 million shares of common stock in the acquisition. This total number of shares includes the number of shares necessary to satisfy AetherWorks obligations to its option holders and warrant holders. The total number of shares we will issue is also subject to reduction to reflect the cost of satisfying an existing $8 million obligation of AetherWorks, and so the exact number of shares to be issued will be determined at the closing. The total number of shares will then be apportioned among the holders of AetherWorks common stock (including for this purpose options and warrants to acquire common stock) and Class B common stock in accordance with AetherWorks' charter documents. Each holder of an option or warrant to acquire AetherWorks common stock will become entitled to acquire the number of shares of our common stock into which the shares of AetherWorks originally provided in such option or warrant are converted in the merger. Under the terms of the Merger Agreement, a further adjustment will be made to the merger consideration if the closing price of our common stock on the Nasdaq Stock Market for the 15 trading day period ended October 31, 2000 does not equal or exceed $22.50 per share. In such event, additional shares of our common stock will be issued such that the consideration per share of AetherWorks common stock is equal to $22.50 per share based upon that average closing price; provided the total number of shares of our common stock issued in the merger will not exceed 19.9% of the total of our then outstanding shares. We will also issue to AetherWorks' employees options to acquire a total of 1.0 million shares of our common stock. The options will be issued at the closing, have an exercise price of $6.81 per share and vest over a two to three year period after the closing of the acquisition. The closing of the merger is conditioned upon satisfaction of certain conditions, including satisfaction of certain outstanding debt obligations of AetherWorks and finalizing the approval of the merger by AetherWorks' stockholders. 3 REVOLVING LINE OF CREDIT Steven Francesco, our Chairman and Chief Executive Officer, has provided us with a $10.0 million unsecured revolving line of credit to fund our current working capital needs. There is no commitment fee for the line of credit. We will pay interest at the rate of prime plus 5% per annum on the amount of any borrowings. The line of credit will be terminated on the earlier of May 31, 2001 or the date we raise $10 million of equity through this offering or other future equity offerings. THE OFFERING Common Stock offered by the Company....... 1,000,000 shares Common Stock offered by the Selling Stockholder............................... 200,000 shares Common Stock to be outstanding after the Offering.................................. 28,561,622 shares Use of proceeds........................... We intend to use the net proceeds of the offering to satisfy an $8 million obligation of AetherWorks Corporation, which is a condition to closing our acquisition of AetherWorks. We will use the remaining proceeds for general corporate and working capital purposes.

To: Alan Hume who wrote (131)	2/5/2000 7:47:00 AM
From: que seria	Respond to of 162

Alan Hume: Looks like dilution to me, but may get more than they pay. Time will tell. You said: If I understand the wording correctly, they are "selling" these shares to raise capital. They are not "issueing" a further 1,2 mio, so therefor, the float is not effectivly being increased. I think of the float as what's tradeable. In terms of the outstanding shares, they are being increased, so it is dilutive. It isn't dilution in the sense of selling more shares to raise capital for internal use, but the effect on per share #s is the same. Q, as always, is revenue/profit per share effect of the expenditure or acquisition. Any comments about what separates NTRX's technology from competitors' tech in its space? I'm long only CSCO now, and considering this one. TIA.