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Technology Stocks : IMON - Quoted from Barron's Corporate Reports -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (2059)	2/27/1999 9:21:00 AM
From: Brooks Jackson	Respond to of 2220

Great find Christian -- all longs should read thoroughly. And ponder: (1) massive dilution Since Jan. 25, more than 3.7 million shares of SEC rule 144 restricted stock worth $24.3 million have been registered for sale, according to SEC records. And on Feb. 8, ImaginOn filed papers that will release another six million shares into the market through the issuance of common stock and the conversion of warrants. Still more can be attributed to a generous offering of convertible preferred shares issued to California Pro Sports employees and shareholders, which raised about $2 million when the company was in a cash crunch several years ago. That lucky group is converting the preferred shares into 4 million common shares with a current market value of almost $18 million, and offering them for sale to the public. All told, insiders and investors holding the preferred shares stood to pocket more than $42 million from sales of ImaginOn stock so far this year. (2) possible de-listing: According to Nasdaq rules, ImaginOn will have to reapply for the listing under its new incarnation and meet the exchange's initial listing requirements. As of Feb. 26, ImaginOn did not have an application on file with Nasdaq, according to a Nasdaq spokesman. (3) more dilution to come: Schwartz said ImaginOn is calling 1.8 million options now on the street, in an effort to clear out the dead wood, forcing people to exercise their options or lose them. Once the SEC approves the call, warrant holders will have 20 business days to exercise. "At the end of the day, all you have is common stock on the street. It's better to be fully diluted," said Schwartz, adding that he doesn't expect to raise more than $4 million from the exercise of the outstanding warrants and options. But getting all of these shares out in the open will help if the company decides to pursue another round of financing, Schwartz said.