Mark,
Fisher and Wingate are new (compared to the Series C list). I am unaware of their status in terms of whether or not they are high profile.
I have read only the first 5-6 pages of the newest 8K. I don't know if I like it one bit. I may definitely hold off buying any new shares for the immediate future. My calculations are based primarily on what I have posted from the 8K below. Also, in my calculations, I haven't taken into account the 5% dividend since I believe it will basically be minimal taking into account the overall picture. Just be aware that my figures may be off and that I didn't read verbatim the 8K as I have to get some sleep tonight.
Maybe GMGC realized last qtr and this qtr would result only in nominal revenues and that any big increase in the price of the stock would come later in the year (2nd half) due to the allegedly large increase in revenue from QWST, INTU, and WK. GMGC may have realized this spring would be the best time for a convertible to take place prior to any rise in the stock price and this would help entice these same investors to pay an additional $20 million.
Also, what is your take now on the "gross" imbalance in the number of call to put options in the last few weeks?
19% of the common shares outstanding is 6,766,000 shares (.199 x approximately 34,000,000 shares). This is the maximum amount they can convert.
$20 million was invested and there should be about $19,240,000 left after the warrants are satisfied (the amount of cash to convert the warrants equal 150,000 common stock x $5.078 = approximately $760,000).
To maximize the number of shares the Series D can acquire, the price at which they convert would be approximately $2.84 (19,240,000 shares divided by 6,766,000 which is the maximum number of shares they can convert). Since the conversion price is 110% of the average 10 days following April 29, May 29, or June 28, then the price of the stock would need to average approximately $2.58 per share ($2.84 divided by 1.10).
>>>The Series D Shares will be convertible, at the option of the holder,into common stock of the Company (the "Conversion Shares") at a conversion rate equal to $10,000 plus accrued dividends divided by 110% of the average of the closing bid prices during the ten consecutive trading days immediately after, at the option of the Company, April 29, 1999, May 29, 1999 or June 28, 1999. Subject to extension under certain circumstances, the Series D Shares will automatically convert into shares of common stock on March 30, 2002,......>>>
I guess what they are trying to say is that it is up to GMGC on what dates that can be used to convert, yet the holders can convert at anytime after GMGC states what date they can use as the convertible date. If I am right, and GMGC did want to retain the value of the shareholders, then GMGC would want the converts to pay the highest possible price and wait until 10 days after June 28 to decide on which of the three dates could be used as a conversion date. Also, it would appear that the Series D holders would have absolutely no reason to short after July 8 since that would be the last of the three 10 consecutive trading dates.
>>>The number of shares of common stock into which the Series D Shares are convertible is subject to adjustment (a "Reset") following the last day of each September and March until March 30, 2002, and on December 31, 1999, and June 30, 2000, equal to 110% of the average of the closing bid prices of the Company's common stock during the ten trading days immediately following each such date.>>>
>>>These conditions include, among other things: (i) approval by the Company's stockholders of this transaction pursuant to the rules of the Nasdaq Stock Market ("Nasdaq") for issuances of a number of Conversion Shares which could potentially exceed 19.9% of the common stock outstanding as of March 30, 1999, at conversion prices that are lower than the market price of the common stock at March 30, 1999;>>>
19.9% of approximately 34 million shares outstanding is equal to 6,766,000 shares that these guys could convert.
>>>(xi) "FIXED CONVERSION PRICE TRIGGER DATE" means the
earlier of (A) the date which is 90 days after the Issuance Date and (B) if, and only if, the Company so elects, either the date which is 30 days after the Issuance Date or the date which is 60 days after the Issuance Date, provided that the Company delivers written notice to each holder of Preferred Shares of its election at least one day prior to such date which the Company has elected;>>>
take care,
Kurt |
