this is posted verbatim from the email I got back from Joe, I have made the responses bold.
Suetta,
Here are my, answers to the questions you have sent me. None of these responses are to appear until after the interview is posted.
1) How will you be able to convert half the company's debt to equity without diluting shares?
Preferred shares, voting and non-voting are a part of the restructure agreement. Preferred shares do not trade but may be convertible into common. Shareholders need to approve what management puts before them. So, we are going to put a package before our shareholders which we feel is in the best interests of all investors.
2) Do you have any intention of, in the words of a recent press release, "putting ultimate control of the company in the hands of management and the board of directors"? If shareholders agree to that, is your intention to then increase the authorized shares or undergo a reverse split?
Yes, part of the restructure agreement is to put control back into the hands of management and the board of directors for major decisions about the company’s future. Remember, I as President and CEO am converting half of the money owed to me by the company into equity so I am not interested in diluting my investment. We will take whatever action is necessary to increase shareholder value because our interests as management are aligned with investor interests. Equally, it is important that management have sufficient shares to use as incentives to attract the very best personnel to the company, something we have not had in years and to conduct its business and continue to grow. Growth must be financed and one way of financing growth is equity. That being said, I do not recall ever suggesting anything about a forward or reverse split in any of the press releases recently issued.
3) Recent press releases detailing an agreement with WebMD and a contract with the USMC were met with a short-term increase in the company's share price followed quickly by a retreat back down. Do you have any ideas on how the company might increase its share price, and bring some stability to an increased share price?
Yes, continue to develop strong relationships with company’s like WebMD, a clear leader in its field. With our new digital platform, our ability to move into international circles has been accentuated. That is why we are in discussions with several major international publishing firms and we hope these will bear fruit. Developing solid operational results is, I think, one of the best ways to attract investors and increase share value. That is my primary focus. Few companies, if any, in our field have the unique platform we have developed and none have the relationships we have developed with the U.S. Military or with professional medical societies. Indeed, EP stands alone today as the only special interest consumer-oriented publication in America to be endorsed by a professional medical society, the American Academy of Developmental Medicine and Dentistry (AADMD) and its logo is on the cover of EP.
4) Do you have any further information on a company webcast for investors?
The interview is scheduled for Monday, October 18, 2010 at 4:15 PM. My understanding is that the interview company will post the content of the interview on YouTube and variouos investment chat boards. EP will, once it receives the content, post it on our web site at www.eparent.com. Investros are always welcome to our website and I should think that this is one of the first places they would turn to for information about EPGL
Q What is the current EPGL O/S?
Approximatley 4.7 billion issued and outstanding. The authorized is 5.0 billion
Q You have stated that the company will not dilute shares but converting massive amounts of debt to equity is increasing share count even if the shares are restricted. Please explain?
This is the agreement we signed five years ago with NIR. It has been fully disclosed in our financial statements for several years. Until we restructure this agreement, it is in full force and effect. I am not at all clear as to what is meant by restricted shares. My understanding is that if shares are restricted, they cannot trade for a period of time and therefore there is no dilution. But I am not clear as to why this issue of restricted shares has been reaised since I do not recall ever mentioning it in any press release.
Q You have stated that no reverse is planned, are you prepared to make a solemn pledge to shareholders that you will never do a reverse?
Never is a very long time and it would be irresponsible for me to make such a pledge. It would almost be as irresponsible as me asking for every shareholder to make a solemn pledge they will continue to invest in EP regardless of market conditions.
Q You have stated that you plan on converting more than half the debt to equity. What happens to the remaining debt? Will there still be any convertible debt on the EP books.
Yes.
Q Concerning the convertible debt to equity, will those shares have any type of anti-dilution clause attached to them?.
No
Q Is there a definitive agreement in place between you and the owners of the medical devices. If so, what cut does EP get and what are the one, three and five year projections for EP earnings from these devices.
Not at this time. But investors would do well to attend the WCD in November in Texas and learn more about how we are working together with Dr. Marcus and others about this potentially life changing intervention. As you know, pain is a subject of high interest to the military and a major portion of the WCD is devoted to military issues. Our keynote speaker this year is the Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen.
There are two theories to arguing with women. Neither one works.
