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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Rajiv who wrote (2090)	2/11/1999 4:26:00 PM
From: Q.	Read Replies (1) \| Respond to of 2506

re. <<The promissory notes with a principal amount of 2.85 million is a liability... Shouldn't this be deducted to get the NTA ? >> Yes and no. There was equity in the deal too. Quite a lot, actually, at 1.14 M shares of common stock, which is a 20% increase in shares out. These shares have a value of about $2.8M. So the financier spent $2.8 M cash to get an unsecured promissory note for $2.8 M plus $2.8 M of cash. I've never seen a deal like this. It can't be a good sign for the co., that they had to do it this way. I don't know how the co. accountants will divide the private placement out between debt and equity, but they would be smart to tally up as much as possible into 'additional paid in capital', i.e. equity. that would put them in good shape with the NASD's NTA requirement. re. the $0.1 M, I goofed. I know Rajiv knows it already, but for anybody else who wants to see it, here's the news release with the announcement of the private placement: biz.yahoo.com And here's the proxy asking shareholder approval for a reverse split: edgar-online.com With regard to the reverse split, they need shareholder approval at the special shareholder meeting, which will be March 19, so the r-split will likely come about a week after that, IMHO.