To: slvfx who wrote (252 ) 10/5/1998 9:38:00 AM From: Jon Siegal Read Replies (1) | Respond to
Slvfx, the company is in the process of raising additional capital through a $2 million, 3-year senior note, or bond. Its actually a pretty good program for investors who can afford it. Basically, like any other bond, this offering from USA is a loan. There are 200 units available at $10,000 each, and the company will be repaying the principal on Dec. 31, 2001. In the meantime, each investor will be paid interest at a rate of 12% every quarter. Each investor will also receive warrants for common stock at $0.10. Of course, the first reaction of shreholders is to be angry at the inclusion of warrants, because they are fearful that the warrants would immediately be exercised and drive the stock price lower. However, in reality the warrants can be converted at any time over the 3-year period, and because each investor will be getting his/her $10,000 investment repaid in 3 years, they will likely keep the warrants for the long-term, knowing that as revenues, profitability, and awareness of the company increases, so will the stock price. Investor s will also receive warrants for preferred stock that will be converted into common stock if the company is sold over the 3 year period. If anyone is interested in this investment, please respond here or call me and I will send materials to you.
