Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : SYQUEST -- Ignore unavailable to you. Want to Upgrade?

To: Dale Stempson who wrote (7113)	9/10/1998 12:10:00 AM
From: Reseller	Read Replies (3) \| Respond to of 7685

RE: Reverse Split, Looks like their authorized number of shares would remain the same. Could they reissue more shares to get past the net tangible assets requirement ? This seems incredible that this type of shareholder dilution is allowed to happen. Regards Reseller From a 14-a SEC filing by SYQT this afternoon: Special Meeting of Stockholders of SYQUEST TECHNOLOGY, INC. (the "Company"), a Delaware corporation, will be held on October 7, 1998, at 10:00 a.m. 1. To approve an amendment to the Company's Restated Certificate of Incorporation to effect a reverse stock split of one share of Common Stock of the Company for every five to ten shares of Common Stock that are issued and outstanding, with the precise number of shares to be converted to be determined by the Company's Board of Directors at a later time. The Company is currently authorized to issue 240,000,000 shares of Common Stock, of which 135,527,455 were outstanding on September 8, 1998. If the Reverse Split Amendment is effected, the number of authorized shares of Common Stock would remain the same, but the number of shares outstanding would be decreased to a range of approximately 27,105,491 to 13,552,745 (depending on the Split Factor selected by the Board of Directors). The Company's shares of Common stock have continuously traded below $1.00 since August 4, 1998, and may be delisted from the NASDAQ National Market unless such shares achieve a minimum bid price of $1.00 or more. The Board of Directors believes that such a delisting could adversely affect the ability of the Company to attract new investors, may result in decreased liquidity of the outstanding shares of Common Stock and, consequently, could reduce the price at which such shares trade and the transaction costs inherent to trading such shares. The Company believes that, if the Reverse Split Amendment is approved, there is a greater likelihood that the minimum bid price of the Common Stock will be maintained at a level over $1.00 per share. The Company also seeks authorization for the Reverse Split Amendment in connection with an agreement in principal by certain holders of the Company's 5% Cumulative Convertible Preferred Stock, Series 7 ("Series 7 Preferred Stock") to guaranty $8,000,000 of additional credit from the Company's current lenders, Greyrock Business Credit and Silicon Valley Bank. Four million dollars of the guaranty is to become available on the date that the Reverse Split Amendment becomes effective. The availability of the other $4,000,000 of the guaranty is to be conditioned on the registration for resale of the Common Stock underlying the Series 7 Preferred Stock, the Common Stock underlying the warrants issued in connection therewith, and other shares of Common Stock issued to those investors in connection with previous financing transactions. The details of the registration for resale of such Common Stock are to be disclosed in the Company's Amended Registration Statement onForm S-3, registration statement no. 333-56597. The Company anticipates that such registration statement will be declared effective prior to the October 7, 1998, special meeting, though there can be no assurance that it will be. The guaranty sought from those investors is critical to the Company given its current cash resources and ability to borrow from other sources. The Company has disclosed in its report on Form 10-Q for the quarter ended June 30, 1998, that it does not have sufficient cash resources to fund operations through the end of its fiscal year ending September 30, 1998. The Company believes that the funds being made available pursuant to the guaranty are necessary to sustain the Company through the end of Fiscal 1998 and into the first quarter of fiscal 1999. However, there can be no assurance that the funds to be made available pursuant to the guaranty will be sufficient to sustain the Company as expected, or that the Company will otherwise have sufficient funds to sustain itself through the end of fiscal 1998 and into the first quarter of fiscal 1999.