DECREASED O/S for MCCY = INCREASED SHAREHOLDER VALUE!!!!
The real focus to yesterday's PR should be to emphasize the INCREASED SHAREHOLDER VALUE.
Why anyone can legitimately assign a negative spin or a neutral spin on the cancellation of 41.8M shares is beyond me and not worth the effort to debate.
Instead, I will place my focus on the EXTREME positive outcome for the change in share structure affecting all longs in the stock.
Originally, in exchange for the delivery of the proprietary technology, time, efforts and monies invested by RH, he received 60M restricted shares of which 50M were to be given directly to RH and 10M to key employees.
As a result of the announcement in yesterday's PR, RH's personal restricted shares are reduced by 40M. These 40M restricted shares are being cancelled and instead, making them 40M in options at specified exercizable prices of 10M at $0.70, 10M at $0.90, 10M at $1.20 and 10M at $1.50.
The reason for this as explained in the Press Release was to increase shareholder value, immediately reducing the total outstanding share count without changing the float, and to show investors that he will be buying his additional shares on the open market at specified exercizable prices which are nearly at or significantly over 5 times the current share price. If instead he had the options to be excercized at $0.10, or $0.20 or $0.30 I would bet that many would be screaming that the stock was only worth $.10 to $0.30. As I see it, by making the option exercise price significantly higher than even the HOY share price boosts my investor confidence level that he expects the stock price to be much higher long before his rights to exercise the options will expire, and still obtain a huge advantage to be able to purchase stock at what he believes will be LESS than the share price at the time of exercising them.
Nowhere in the PR does it state that RH will return ALL the 60M restricted shares, so there is NO REASON whatsoever to assume incorrectly that this action will affect the proprietary technology ownership. In fact, it doesn't. Ask RH yourself if you think that! What has actually happened is that for the proprietary technology ownership and invested efforts, RH only has returned 40M of the original 60M restricted and showing to the investors his commitment to increasing shareholder value.
Put another way, if given the choice as an investor to have your CEO either given shares versus given options to buy shares at a stock price higher than over 5 times its current share price value, is there anyone who wouldn't prefer he have to pay for the shares????
How anyone can possibly put the INCORRECT spin on such an action by saying this does NOTHING for the shareholders makes no sense.
IF he had INCREASED his restricted shares, the total O/S would go higher and everyone would scream DILUTION and say how negative this is for the company.
Now that he has DECREASED his restricted shares, the total O/S has gone lower by 40M shares!!!!!!!!!!!
FORTY MILLION SHARES WERE CANCELLED from the 60M restricted shares!!!!!!
NOT ONLY that, but RH cancelled 1.8 ADDITIONAL shares from the previous shell owner.....
That is 41.8M shares cancelled. That is a REDUCTION in total O/S, with the SAME FLOAT!!!!!
ANYTIME a company cancels restricted shares and reduces the total outstanding shares, while keeping the float at or lower the previous number, the shareholder value INCREASES!!!!!!!!!!!!!!
I VIEW THIS PR YESTERDAY AS HUGE!!!!!
October 26, 2007 - 10:00 AM EDT
Effective Control Transport LLC Reduces Outstanding Common Shares by 41.8 Million Shares
Media City Corp. (PINKSHEETS: MCCY) (www.econtroltransport.com) CEO Raphael Huppé today announced that he will be cancelling 40 (forty) million of his personal common stock shares to treasury. In return, he will receive 40 (forty) million options which will have a 5-year term and will become fully vested on November 3rd, 2008. Mr. Huppe would also like to announce that there have been 1.8 million shares recovered from the previous shell owner and that these shares will also be cancelled to treasury.
Description of cancellation:
1) Type of stock to be cancelled MCCY Common stock
2) Number of shares to be cancelled 41.8(forty one point eight) million
3) Scheduled date of cancellation October 29th 2007
Description of options issue
1) Number of options 40 million MCCY common stock options
2) Execution term 5 years
3) Vesting date November 3rd 2008
4) Stock option pricing 10 million shares at $0.70
10 million shares at $0.90
10 million shares at $1.20
10 million shares at $1.50
"I am very excited with the recent progress we have had here at Effective Control Transport; the acquisition of Argo Navigation, our staff additions; Gib Medeiros, Bruno Farbos and Claude Lemay, the overwhelming demand of our FOLO system, specifically the FOLO CRAM. These developments including today's announcement of the share structure reorganization should provide additional confidence to our shareholders in our commitment to growing our company on the long term and increasing our share value," Mr. Huppe said.
Disclaimer: You are completely responsible for your own investment decisions and who and what you believe on the boards.You are responsible for properly analyzing and verifying any information you choose to rely upon.
Doc
