And???? Get off this "preferred" vs. "common" it's a joke -
Common stock is ownership in a company, just the basic stock that we're used to trading. Companies sell common stock through public offerings, and it's traded among investors on the secondary market. Those who hold the stock hope to earn dividends from their share of company profits. However, many profitable companies don't pay dividends, and never have any intentions of doing so (i.e. Microsoft).
The obvious risk with common stock is that the price may fall. Unlike some other investment vehicles, investors can not lose more than their initial investment.
Like common stock, preferred stock is sold by companies and is then traded among investors on the secondary market. Preferred stock is less risky than common stock, therefore investors can expect less reward.
In many ways preferred stock works like bonds. While bonds guarantee regular interest payments, preferred stock guarantees regular dividend payments for a specified time. Preferred stock price is less volatile than common, and virtually eliminates the possibility of large capital gains.
Preferred stock is rated in a similar fashion to bonds as well. Standard & Poor's ratings range from AAA (best) down to D (worst). These ratings help investors make judgments as to whether the underlying company will be able to pay dividends. Should the company default on dividends and declare bankruptcy, preferred stock holders are entitled to assets before common stock holders.
The bottom line is that preferred stock is less risky than common stock. It's designed to provide an income generating opportunity for investors while raising capital for the underlying Company
There are just so many reasons why Toland's preferred stock is just simply not an issue and if we really must get into business 101 again....
$800,000 is NOTHING!!!
It's not even that much for a company that is NOW revenue producing!!! It's like making $35,000 a year and having a Vehicle loan for $30,000 to place it in perspective
Income based on low profit % is $720,000 a year or $60,000 a month
Gee I wonder what happens since the current profits pay the bills according to last quarterlies, what will happen when we get even just one more contract???
"Oh wait teacher call me!!!"
"Will the company take the additional profits and place some towards expansion and paying off low interest loans?"
"why yes Stevie, that is normally what a smart business will do that is in the early stages of growth"
"so what's the timeframe it would take, teacher, for a company that makes say $250,000 (minimum profit if EOY GOAL IS MET) a month in profits to pay off an $800,000 debt?"
"well gee Stevie, thats business 201 but I'll let you know anyway....if they make $250,000 a month and were to even just pay $100,000 a month towards their "debt" which would leave them $150,000 for expenses and growth, they could realistically be DEBT FREE in a matter of 8-9 months depending on compounding interest"
"wow that's amazing!! So then....."
YEAH SO THEN....END OF THIRD QUARTER 2013 SGLN COULD VERY WELL BE DEBT FREE AS LONG AS EOY GOALS ARE MET FOR 2012