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.

Strategies & Market Trends : Floorless Preferred Stock/Debenture -- Ignore unavailable to you. Want to Upgrade?

To: Bagladdy who wrote (227)	1/1/1999 1:50:00 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 1438

Charles, I am sorry I cannot be more definitive. The document you cited is issued by ESVF, not ZULU. All I can see right now (and I am afraid much more will show when additional S-3 documents will surface) are 5 million warrants that are floorless (which is really not a problem since the number of shares is fixed. I should mention that these warrants as described are worthless unless the stock goes above $4, since under $4, the warrants' holders might as well go into the market and acquire shares, thus this wording seems to be missing something in the 8-k), and the $5.3 MM in convertible securities to accredited investors. These have indications of being floorless, but no details on the nature of the floorlessness. The latter are the one that could (and I say could because I know not other important details such as float, current price of ESVS and are they already part of ZULU etc.) become a source of a death spiral. On top of that, I do not see yet additional danger, but if they think they can pay some $25 MM in few years (the note) then there must be some viable business there (unless the only viable business is fleecing public share holders). You got to find more information before I can look into this further. Good luck and happy new year. Zeev