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Strategies & Market Trends : Floorless Preferred Stock/Debenture -- Ignore unavailable to you. Want to Upgrade?

To: Dug who wrote (384)	4/26/1999 9:57:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 1438

Dug, one really needs to look at the details of this deal, it has Castle Creek in and they did a "strange" floorless with VLNC (which they partially then removed the floorless feature on). The key is: In certain cases, the conversion price is subject to adjustment at twelve and twenty-four months after closing and in certain circumstances, the debentures may be convertible at market price. you got to find out what are those certain cases. In VLNC it was a "Material order" what is it here? I'll try and see if I can dig the 8k and the appropriate s-3. Zeev Zeev

To: Dug who wrote (384)	4/26/1999 10:18:00 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 1438

Dug, initial review of the 8K revealed the following and it does not look good: "The Company acknowledges that its obligation to issue Conversion Shares upon conversion of the Convertible Securities and the Warrant Shares upon exercise of the Warrants is binding upon it and enforceable regardless of the dilution that such issuance may have on the ownership interests of other stockholders." It usually means that the investors want no problems if massive dilution occur by getting management to admit they understand that massive dilution is possible. If you own this stock, you'd better comb that 8K with a fine comb, it is too long for me to go through, but there are enough warning signs and conditions to worry about. Zeev