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Microcap & Penny Stocks : Rentech(RTK) - gas-to-liquids and cleaner fuel -- Ignore unavailable to you. Want to Upgrade?

To: Lord Smooth who wrote (1255)	2/19/1998 12:19:00 PM
From: Andrew H	Respond to of 14347

Schop--this may not be quite as dire as we were led to believe. I have quoted at length from the filing available on Yahoo and highlighted relevant additions. The 200K series A do indeed appear to be floorless, but the Series B have a floor. Given the wide sponsorship and interest in this stock, after a bit of study, I find Zeev's shorting scenario highly unlikely, given that at current prices we are only talking about less than 1.5MM shares. Of course anything is possbile, but not very likely, I think. To achieve its stated plan to grow, diversify and acquire new businesses, the Company negotiated the placement of 200,000 shares of Series 1998-A Preferred Stock at $10.00 per share together with warrants to purchase 200,000 shares of Series 1998-B Preferred Stock and, at the option of the Company, up to an additional 600,000 shares of Series B Preferred Shares at $10.00 per share; or a commitment by the purchasers of up to $10,000,000 in the preferred stock. As of February 10,1998 the Company has sold 200,000 shares of its Series 1998-A Preferred Stock at $10 per share. The net proceeds were approximately $1,765,000. The Series 1998-A Preferred Stock pays a dividend of 9% per year and is convertible over 18 months into common stock at the lesser of the average closing bid price of the common stock for the five trading days preceding the sale of the preferred shares, or 82.5% of the average closing bid for the five trading days preceding the conversion of the preferred stock into common stock. The warrants provide for the purchasers, during the 18 months after purchase of the Series 1998-A Preferred Stock, to purchase, and the Company to sell, 200,000 shares of Series 1998-B Preferred Stock for $2,000,000 and provide the Company during the same period the option to sell to the purchasers an additional 600,000 shares of Series 1998-B Preferred Stock at $10.00 per share. The Company has no obligation to sell any of the 600,000 shares of the Series 1998-B Preferred Stock to the purchasers. The Company does not have to sell any of the 800,000 shares of Series 1998-B Preferred Stock to the purchasers if certain conditions occur, primarily related to volume and the price of the common stock in the market. The Company has no obligation to sell any of the 800,000 shares of Series 1998-B Preferred Stock if the average daily share price for the common stock for the 10 trading days prior to the sale is less than $1.00 per share. The Series 1998-B Preferred Stock pays a dividend of 9% per year and is convertible into common stock until December 31, 1999 at 82.5% of the average closing bid for the five trading days preceding the date of conversion. The Company expects to realize income during the next 15 months from its license granted for the plant at Arunachal Pradesh in India. The Company expects to receive license fees in the amount of $240,000, and additional fees for engineering services are expected though not yet under contract. Income from royalties associated with the India plant are not expected until after the completion of construction and startup and operation of the plant. Construction is not expected to be completed until the first part of 1999. The Company is discussing other proposals made by several energy companies, including Texaco Group, Inc. for exploitation of the Company's gas-to-liquids technology through licenses or other business ventures. No assurances can be made that these discussions will result in either business ventures or revenues to the Company. The Company has deferred tax assets with a 100% valuation allowance at December 31,1997 and September 30, 1997. Management is not able to determine if it is more likely than not that the deferred tax assets will be realized.