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Technology Stocks : Osicom(FIBR) -- Ignore unavailable to you. Want to Upgrade?

To: Scott Ozer who wrote (6798)	5/15/1998 11:12:00 PM
From: Dennis G.	Respond to of 10479

My understanding of this agreement is that it is an investment, not a loan. In other words, Osicom doesn't own them $8 million, just some shares to be determined by market price and their choice of when to convert. Is this correct? If, for instance, in 90 days the average of the three low bids was 4 and all the shares were converted at .86*4=3.44, then they should get 2.33 million shares among all the participants. Assuming this would put total share at around 25 million, that would be 9.3% of common. If we assume that there is at least 2 participants, each with no more than 50% of the $8 million, then all could conceivably convert at that time. If the price is 2, then they would be entitled to twice as many shares. Again, if there were no participant with more than 25% stake, then they all could convert and there would be a 19% dilution of the common. And similarly, if the average is 9.3 or better, then the dilution is the minimum of 1 million shares. Is this all a correct interpretation? Obviously, if the company fails to deliver in its sales and the price drops the dilution would become significant. It seems they have 90 days to deliver. Also found this paragraph: " 4.11 Capital Raising Limitation. The Company will not, prior to the ninetieth (90th) day following the date on which the registration Statement is declared effective by the Commission, issue, offer for sale or sell any Common Stock or other equity security of the Company, or any security or instrument convertible or exercisable into or exchangeable for Common Stock or any such equity security (the "Capital Raising Limitation"). The Capital Raising Limitation will not apply to the issuance of Common Stock (i) as consideration in a merger, consolidation or acquisition (the primary purpose of which is not to raise equity capital), (ii) pursuant to a strategic partnership or joint venture which is formed for a bona fide commercial purpose, (iii) pursuant to a registered public offering, or (iv) pursuant to the obligations described in the Company's Annual Report on Form 10-KSB for the year ended January 31, 1998." Does this mean they cannot do any more similar deals for 90 days? Dennis