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Microcap & Penny Stocks : lcav -- Ignore unavailable to you. Want to Upgrade?

To: Manny Gugliuzza who wrote (500)	8/8/1998 6:01:00 PM
From: Harry W. Lowe	Read Replies (1) \| Respond to of 942

AR, AR I hope that your surgery is successful and that you will be 100% again soon. If you take the time to read LCA Vision's proposal (see the following URL) you will see that this plan is trying to accomplish three things: <http://www.edgar-online.com/quotecom/full/?doc=0001003130-0000906318-98-000063> 1. Raise 10 to 15 million dollars (cash shortage has been a continuing problem, but with this plan the pay back period will be extended and will depend on the success of the company). This will keep the company in business, but will have an impact on per share earnings thereby depressing the stock price until the money is paid back. Also, through the issuance of $10,000,000 of Preferred Stock at 6% interest per annum (payable as a direct expense from earnings), a common stock conversion plan is included that will in affect establish a support price for the stock; but also depress the stock price until the estimated 7,372,972 of common conversion shares are converted. This will remove the potential for the "explosive price appreciation" that has been the case in recent times. It should also be noted that if the ten million dollar preferred stock plan is not sufficient for company operations and expansion, a provision is made for issuance of an additional 5 million dollars of Preferred stock. 2. Qualify for listing on the NASDAQ National Market rather than the Small Cap Market. To qualify for the National Market, the common share price must not be less than $5.00/share. As an example considering today's price of $3.00, a reverse split of 1 for 5 would raise the share price to $15.00 at an 80% reduction in the number of shares. This reverse split will have a short term negative affect on the share value as recognized by the company ( the plan's excerpt below under the title "Split"). Also there is no guarantee that the company will achieve NASDAQ National Market status even after the reverse split. 3. Employee stock option plan. This is a detailed plan with many provisions, but fairly standard for the industry. It will benefit all but to a greater extent to the higher salaried employees, officers, and board directors. This will encourage greater productivity from the employees but will have a depressing affect on the share price when share buy back options are exercised. The following are selected paragraphs from LCA Vision's proposed plan: ---------------------------------------------------------------------- Split The Board of Directors recognizes that reverse stock splits are commonly believed to result in a decrease in the aggregate market value of an issuer's stock. The Board believes, however, that this possible negative impact is outweighed by the what it perceives to be greater positive effects for the Company by becoming listed on The Nasdaq National Market. A vote for the proposed amendment will include authorization of the Company's Board of Directors not to file the amendment to effect a reverse split (the "Reverse Stock Split") in the event the Board determines that filing the amendment would not be in the best interests of the Company's stockholders. Factors leading to such a determination could include, without limitation, a substantial increase in the per-share trading value of the Company's Common Stock. There can be no assurance that the Reverse Stock Split will not adversely impact the market price of the Common Stock, that the marketability of the Common Stock will improve as a result of approval of the Reverse Stock Split, or that the approval of the Reverse Stock Split will otherwise have any of the effects described herein. ---End of Selected Copy--- ------------------------------------------------------------------- In summary, we wondered why the price performance of LCAV went "flat" after the recent explosive price growth. Well now we know why. As I have commented in the past, fundamentals are the determining factor that controls the price actions and long term growth (or depreciation) in stocks, but only a few insiders know and profit from the true fundamentals, while the great unknowing mass of uninformed investors follow like sheep with relatively little profit. Technical analysis can detect the fundamental affect on the price action without knowing what the fundamentals are. Harry