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Technology Stocks : CYOE / Diana Corp. Why has the SEC not halted this pig? -- Ignore unavailable to you. Want to Upgrade?

To: TheLineMan who wrote (202)	6/4/1999 1:06:00 AM
From: Q.	Respond to of 242

Stock dilution: there are now at least 24.4 M shares, fully diluted, by my count, with a corresponding market cap of $183 M. That's from info in the 8k: There were 10.5 M shares outstanding before the private placement. The pp was for 1.8 M shares, plus 0.1 M shares and 0.2 M warrants to the placement agent, and 0.3 M warrants to the convertible holder, plus so the count is now up to about 12.4 M shares plus warrants. In addition, the filing indicates that there is a large overhang of other shares: 7.2 M shares reserved for options and warrants, 2.2 M shares reserved to settle class action suits, 0.9 M shares to acquire Systeam (sounds like the deal is still pending), and 3.4 M shares as collateral for a 'contemplated $10 M loan'. Let's add these numbers up: 10.5 M shares before pp 1.9 M in pp 0.5 M new warrants in pp 7.2 M options and old warrants 0.9 M for Systeam 3.4 M for loan collateral _________ 24.4 M diluted shares So that puts the market cap, at 7 1/2, at a whopping $183 M. What I haven't included are shares for the remaining convertibles. I don't know how they plan to redeem those ... if they do it using the $10 M loan then the shares I've listed above will be a complete list, but if they do it by issuing stock, as they did in this deal, then the dilution will be more severe than I listed above. The authorized capital stock of the Company consists of 30,000,000 shares of common stock, par value $1.00 per share (the "Common Stock") of which 10,558,764 shares are issued and outstanding as of April 25, 1999, and 5,000,000 shares of preferred stock, par value $.01 per share (the "Preferred Stock"). There are 700 shares of Series A Convertible Preferred Stock outstanding, all or some of which are to be redeemed by the Company as a condition of this Offering. Other than the Series A Preferred Stock to be redeemed, there are no other shares of Preferred Stock outstanding. As of April 25, 1999, the Company has reserved for issuance 7,198,339 shares of Common Stock underlying options, warrants and A and B Units of Coyote Technologies, LLC, and has reserved 2,250,000 shares for issuance in connection with the contemplated settlement of certain class action litigation. The issued and outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and non-assessable. The Company has also reserved shares underlying Series A Preferred Stock, which reservation shall be canceled when such Preferred Stock is redeemed. The Company has escrowed 884,050 shares in contemplation of acquiring additional interests in Systeam, S.p.A. and may issue shares beyond the 884,050 in connection with such acquisition. A total of 3,400,000 shares have been reserved and issued in the Company's name and are being held in escrow. These shares are intended to be used as collateral for a contemplated $10 million loan.