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Microcap & Penny Stocks : PCES - paid $4.75 Million by 3M Corp!!! -- Ignore unavailable to you. Want to Upgrade?

To: Soccrates who wrote (40)	3/5/1999 9:08:00 PM
From: Zeev Hed	Respond to of 523

Soccrates, sure the public stockholders will own part of the new company, but let say they bring in $2 MM in cash and give ALL PCES 10% of the new company, the question is what part of that 10% will have to be given to those holding preference. If I understood correctly, there are close to $3 MM "owned by preferred", so if the company is liquidated, the whole $2 MM in the till will go into their pocket. The only way they can do it differently if a third party can merge with them and the IRS will recognize transfer of some $20 MM in carry forward losses. The preferred holders will probably want a premium for their $3 MM (depending how long they have been at risk), and the $20 MM (past losses) maybe worth to someone else some $6 to $7 MM. If you assume that a deal occurs rapidly, then everything is dandy, but if a deal does not happen within a window of time some of the costs continue, and it is becoming less likely that the IRS will allow transfer of the tax benefit. For the transfer to be valid the two business must be in related fields. If everything works fine and fast you have a chance of getting between $.5 to $1 for exisiting shares (the common), if not, it is the basement. For those thinking that this can be a long term investment, it is not, it is a time bomb, it can blow up very nicely or fall apart because at the closing some one made a sarcastic comment about Clinton not appreciated by the other party. Zeev