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Microcap & Penny Stocks : Saliva Diagnostics (SALV) -- Ignore unavailable to you. Want to Upgrade?

To: Harold who wrote (2035)	2/5/1998 9:50:00 PM
From: rl	Read Replies (2) \| Respond to of 3369

Harold, Several reasons that I can think of for McLachlan to want the reverse. First, the latest POS filing on EDGAR says that SALV has a hearing in front of NASDAQ to try to keep their listing. This is usually a last gasp effort by troubled companies and must have substance for NASDAQ to even consider. In order to keep the price above $1, the reverse is crucial, but does not guarantee that NASDAQ wiil agree to the plan. This is all obvious, but the monetary component may be less so. With the recent approval of the increase in authorized shares to 50 million, and the proposed reverse not reducing that figure, the 32 to 40 million now outstanding is cut to 3-4 million. The price goes to $2.50-3.00 for a very short window. McLachlan does another private placement at a 40-50% discount, the stock hits the market, and we are below $1.00 again. McLachlan cannot do much in terms of private placements now. Not enough shares are available. He would have to have SALV issue almost 7 million shares to get $1 million. Even that would be difficult with imminent delisting and lawsuits against the cmopany. All of this means a reverse split approval and retention of NASDAQ listing gives McLachlan the opportunity to print more shares and dilute, without ever becoming profitable, while he issues himself and the other BOD members more options and salary. The reverse will do nothing for the current shareholders but let SALV management off the hook and dilute our holdings even further. rl