To: Juli who wrote (6849 ) 7/19/1998 6:29:00 PM From: James Harold Alton Read Replies (3) | Respond to
Jewel, It looks like the Series E is a relatively new issuance, still working on that one. I thought I would add some input on the earlier issue the series C which might offer some interesting food for thought. There were 4,525 shares of series C issued through the end of 97, which raised a bit over 4.5 million $ for the company. The subsequent conversion of most of that Preferred into common and if we figured on converting the rest at the same Preferred/Common ratio would have resulted in the issuance of a little over 4 million shares of common. Not insignificant, but if you take a look at our Annual report page 27 near the top where the line "proceeds from sales of common stock" note that there were not any shares sold. Now consider the fact that the business DCI is in has relatively tight margins and that as a BB company bank financing options are limited. Growth without injections of cash would be extremely slow IMO, so perhaps we can agree that cash must be raised to fund that expansion and growth. The ultimate goal as has been stated many times, is the build revenues to over 100 million and to sell the company, if that is to happen while most of us are still alive, it appears to me that we must have a way of raising capital. (G) Is the issuance of preferred the best way to go? If not then why would Murphy continue to use that option? Why would you chose to not believe that he would take the best option available to him, at least until you have proof otherwise?? The litmus test of how we are doing with the ultimate goal of selling the company, is and has always been our Revenue per share growth. Yes, more shares are going out because of the preferred but if the Revenue per share continues to rise, we are still making progress and this progress has been spectacular over the last year. The only other option I can see besides the preferred would be to sell additional shares, either privately or publically to raise cash..I would entertain that option if it created less dilution. Either way though I don't see how we can grow without shares being issued unless we get lucky and turn another division or two for cash. (a possibility) I would like to know the answer to whether the holders of the common recieved from the coversion of the Preferred are holding or selling for sure, perhaps I can find out.
