Robert,
Thanks for the Stockrumors article.
This should be my last post on the convertibles:) I think the convertibles will now convert based on the last four days.
I am not taking into account the A or B Series and I am not taking into account any warrants. Plus, some of my figures could be slightly off. I flunked accounting in college:) These should be, IMO, very close ballpark figures. If there are any accounts out there that think I am screwed up, then feel free to let me know.
Here goes my logic:
1. Shares authorized = 2,691,729 at a price of $11.188 which was the date of the agreement last summer.
2. Max authorized shares is 200% which = 5,383,458 shares at a price of $5.59.
3. Shares already converted = 2,857,000.
4. Shares that can still be converted = 2,526,458.
5. Total $ amount for the convertibles = 2,691,729 shares * $11.188 = $30,111,000 (approximately).
6. a. To determine the price of the first conversion (1st 49%) you need to use a little math. "X" (amount in $ that was converted) divided by $30,111,000 = 2,857,000 converted shares divided by 5,383,458 total shares. So "X" (amount in $ that was converted) = 2,857,000 converted shares * $30,111,000 divided by 5,383,458 total shares. Anyway, this amounts to $15, 979,898 (which is the amount in dollars that was converted).
b. "X" (average share cost of the converted shares) = $15,979,898 divided by 2,857,000 converted shares = $5.59 per share that has been converted.
7. Amount in dollars that still needs to be converted = $30,111,000 - $15,979,898 = $14,131,102.
8. The price at which the remaining shares can be converted = $14,131,102 divided by 2,526,458 shares = $5.59/share.
9. The Series C holders would want to get the shares at or below $5.59 per share. "X" = $5.59 divided by 115% = $4.86. The Series C would have wanted the price for the 4 lowest days to equal no more that $4.86 for the remaining shares.
10. The four lowest days for the stock were this past week. The average = $4.71.
So there is approximately a 15 cent difference in the ave price and my calculations. This could be explained by bad math or screwed up logic on my part, other individuals jumping on the band wagon while other small time investors became scared, margin requirements, or the Series C holders wanting to insure that they are able to get all the shares they believe they are entitled to. I assume that the convertibles can convert at a lower price than the $5.59, as long as they don't exceed the maximum shares authorized.
We will find out in the coming weeks.
Take care,
Kurt
PS There was something in the latest proxy that stated something about 2.9 million that could still be converted. I think the difference between the 2.9 million and my 2.5 million shares is the warrants |
