To: wombat who wrote (27359 ) 2/7/1998 7:12:00 PM From: William Harvey Read Replies (4) | Respond to
All,some of the pressure on this stock as a result of the preferred conversion that may take place the first of March. As you know (from the S-1) there are $5.4M in convertible preferred stock, 20% of which may be exercised in the first month. One share was equal to $10,000 at the start. JNC Opportunity came in a few weeks later and bought $2M of preferred. The formula for conversion is: [(.08)(N/365)(10,000)+10,000}/(W): N is the number of days since the preferred shares were bought. W is either a fixed conversion price, (1) the lesser of (a) $5 or (b) the average closing bid 20 days prior to the preferred shares being bought (ie, $5 for the $5.4M worth of preferred bought 10/31 and about $4.4 for the $2M bought by JNC--I just added up the closing price during those 20 day periods and divided by 20.). There is a second option for our variable W. W could be (2) 85% of the average closing price over 20 days preceeding the conversion (from months 4 through 6) and 80% of the average closing price over 20 days preceeding the conversion if the company opts to convert after 6 months.geocities.com
