ZA Group Inc (ZAAG)

[wallstreet1231]

There is no way the company can side step their responsibility with respect to the Series E Preferred shares - I am a series E preferred share holder. The shares were purchased with specific terms and conditions being applicable.

The holding period for my preferred shares has expired so I can concert at any time. So why haven't I - pretty simple.

1) I acquired 500 preferred shares at a cost of $1,250 - the one year holding period has expired so I can convert them to common shares at anytime now.

2) The conversion is 100,000 common shares per one share of preferred E - this equates to 50 million shares.

3) Here is the key point - the preferred shares are Anti - dilutive - this means the shares and conversion aren't subject to dilution. So why would I sell/convert my shares when the common price is at .0001 - the lowest price possible. There is no down side and only upside. Should the company liquidate, which I will explain in my next post why I don't think this is likely, I would get preferred status on liquidation rights.

Bottom line is I am not motivated to convert my shares now. But I would think the company would be motivated to negotiate with preferred holders so they don't flood the market with conversion shares once the company begins to increase shareholder value.

My opinions as always.