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Microcap & Penny Stocks : MIDL .... A Real Sleeper -- Ignore unavailable to you. Want to Upgrade?

To: Ga Bard who wrote (459)	11/19/1997 7:08:00 PM
From: C. Riley	Read Replies (1) \| Respond to of 7039

Maybe I wasn't clear enough... let me restate... The 8-K states there are 117,396 Series A Preferred. Rules of accounting do not care whether they have been converted or not. All companies, including MIDL, are required by law to follow this convention -- which requires the full number of outstanding Series A Preferred multiplied by their conversion rate of 35:1 be included. Therefore, unless the 8-K is incorrect in stating the number of Series A Preferred outstanding, the correct total of diluted shares is 17.1 million following the New Departure acquistion (Oct. 10). This is free advice from my CFO (a CPA) who is skilled in SEC filings.

To: Ga Bard who wrote (459)	11/19/1997 7:24:00 PM
From: C. Riley	Read Replies (1) \| Respond to of 7039

Here are the totals for calculating fully diluted shares from the 8-K: 2,575,217 shares of Common Stock 4,108,860 additional common share equivalents from Series A 10,500,000 additional common share equivalents from Series B ---------- 17,184,077 fully diluted common shares reported to SEC Can you explain why the 8-K reports 2,575,217 shares common while you are reporting 3.0 million (1.2 float + 1.8 insiders)? Where did the additional 400,000 come from since October 10? Note that the Series B potential must also be included when calculating the number of diluted shares. There are good reasons why the SEC requires these accounting practices -- namely to protect shareholders from understatement of dilution. Reporting the number of converted shares in insufficient. Again, these numbers do not include the results of the latest acquisitions - only New Departure.