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Microcap & Penny Stocks : Zia Sun(zsun) -- Ignore unavailable to you. Want to Upgrade?

To: ST Trader who wrote (6961)	3/10/2000 11:38:00 AM
From: Sir Auric Goldfinger	Read Replies (1) \| Respond to of 10354

Care to make a coherant comment about the massive dilution and float overhang? You may take your time, I know it is tough: "By: frisky Reply To: 18053 by Frank_Ching Friday, 10 Mar 2000 at 1:13 AM EST Post # of 18059 According to OIA acquisition agreement, ZSUN must issue 1 additional share to former OIA shareholders for every dollar of OIA income before tax, interest and depreciation between April 1, 1999 through March 31, 2000, if the figure is above $2.5 million. OIA has achieved the easy target in the third quarter of 1999. ZSUN must issue at least 7.7 million shares for the last two months alone to Scott Elder et al. There are more to be issued in March. I do not know how many shares it had to issue in the fourth quarter of 1999 until I see the official EPS release. You can argue that Mr. Elder deserves the bonus. However, the diluted EPS for the shareholders will not be very impressive. From the IRS viewpoint, the additional shares are classified as non-qualified options because when the options were granted, the exercise price was $0 rather than the fair market price then. Mr. Elder et al. must pay the ordinary income taxes for Federal and State plus Medicare tax when they exercise the options. We are talking about at least $50 million tax bill. They have to sell at least 4 million shares in the open market just to pay tax. This will have a detrimental effect to ZSUN's share price, because it will increase the float significantly. Of course, they can gradually exercise the options, but the taxes cannot be exempted. They still have to sell shares to pay taxes. The float will gradually increased. ZSUN will not be a low float stock anymore. ragingbull.com "