Remote Dynamics Inc (RMTD)

[flemsnopes]

The convertible debt will almost certainly increase the OS very quickly unless there is significant improvement, or some prospect of improvement, with respect to execution of the business plan. Frankly, reading the last 10K doesn't inspire much hope, but there are a couple of intriguing facts that keep me from giving up completely. The most significant is the run to .25 in January with no news and seemingly little hype. The other factor is the debt holders themselves who are either terribly gullible or have some reason to think there will be something coming down the road which will provide at least the chance of being repaid in something other than essentially worthless stock. Of course, they could sell relentlessly into the market with their millions of shares, but that would almost certainly send the price to .0001 in nothing flat, and at that price, all 750,000,000 authorized shares would be worth $75,000 (and that assumes you could actually sell all 750 million shares!) I am not sure what the breakup value of the company would be should the debt holders decide to foreclose and sell off the assets, but I don't see anything that looks like $10 million worth of extremely liquid assets on the balance sheet. I have included an excerpt from the 10K for documentation of the debt.

We expect to repay our secured convertible notes in shares of common stock valued at a discount of the common stock’s trading price which will result in a significant issuance of new shares of common stock to the note holders and cause material dilution to the then existing holders of our common stock.


We expect to issue a significant number of shares of our common stock in payment of amounts due under our secured convertible notes during 2008 and thereafter.


In March, 2008, we resumed making payments to certain of holders of our secured convertible notes of amounts due under the notes by issuing shares of our common stock under the terms of the notes. The initial payment was in the form of 7,787,535 shares of the Company’s common stock in satisfaction of $172,595 of obligations due under the notes. This represents an issuance price of $.027 per share (for the Series A Notes) and $.031 per share (for the Series B Notes). In general, the shares issued are available for immediate resale by the holders in accordance with Rule 144 under the Securities Act of 1933, as amended.


As of December 31, 2007, we had outstanding $4,193,819 principal amount of our Series A Notes and $6,550,452 principal amount of our Series B Notes, in each case, excluding accrued default interest and liquidated damages payable. To repay these amounts in shares of our common stock (utilizing the issuance prices from our March 2008 note repayment) we would have to issue 364,631,533 shares of our common stock.


In addition, if the trading price of our common stock decreases, the number of shares of common stock we would need to issue to satisfy our obligations under the notes could increase significantly, materially diluting the holdings of our then existing stockholders.