Ocata Therapeutics Inc fka OCAT

[rocky301]

Good Morning All,


To get everyone on the same page here I e-mailed Mr.Rabin concerning his statement of 1.5B fully diluted number at the CC.

I would like to thank Mr.Rabin for taking the time last night. I stated the importance of ironing this issue out and he was kind enough to stick it out with me during many e-mails. I am in hopes the following info clarifies. I will be posting what I believe to be correct and not a string of copy/paste e-mails. Mr.Rabin is aware of where I post so any mistatements or corrections brought to my attention will certainly be posted for all to see. This is my way, so if some of you don't like it then feel free to do the research yourself..:)

ACT calculates the fully diluted OS# by usingg the Treasury Stock Method. This is important to know to follow along. Please take a minute to read the following. This section apllies to stock options and warrants.

Trasury Stock Method
The treasury stock method must be factored into the diluted shares earnings in order to meet the generally accepted accounting principles (GAAP). It simply means that when a company is figuring out diluted shares it has to also figure out the shares that can be created due to in the money options and need to be added into the equation. The formula looks like this.

(number of In The Money Shares)– (number of shares that can be repurchased)

For example company XYZ owns 1000 in the money options at $10 and the stock is trading at $20. This allows them to repurchase 1000 shares of the company. The proceeds the company will receive is $10,000 ($10 x 1000).

This means that the company will be able to repurchase 500 shares ($10,000/20). That means the new shares added is (1000 added – 500 repurchased or) 500 new shares.
http://www.stocks-simplified.com/Treasury_Stock_Method.html
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the 1.5B fully diluted mentioned at CC was for year end. I don't see the point in addressing those numbers and will deal with the NOW.

With the above in mind, the following numbers from 10K are not used in the "fully diluted OS#

"As of December 31, 2010, on an aggregated basis our debt and preferred stock financings may result in being converted into 6,400,425 shares of our common stock, and warrants and options that may be converted into approximately 183,307,361 shares of our common stock."

The above totals about 190MM shares. Warrants have decreased by 50MM since the beginning of the year. That leaves us with 140MM stock options and warrants outstanding..15.8 million options and 123.8 million warrants and debt/preferred shares that can be converted to equity.

Now, due to the Treasury Stock Method of accounting, only 93 million warrants and options are on a fully diluted basis or another words 93MM options and warrants are "in the money" while the balance is issued at much higher pricing.

Clear as mud, right?

Time to sum up this section with a number and then we can move on to another topic.

March 11, 2011 OS# is 1.507 Billion Outstanding shares. For the fully diluted number add 93MM..

Fully diluted OS# as of March 11 would be 1.6 Billion shares

Socius 25MM financing
The warrants for the $4MM tranche from Socius are included which takes us to the next topic...

Our discussion ended this way. If ACT wanted to draw down the balance of $21MM at todays prices it could NOT be done. There is NO intent or plans to raise addition capital at current pps levels.
ACT is NOT increasing our authorized shares at this time.

I am sure questions will pop up here so fire away and hopefully we can all get on the same page...that's it for now...thanks