But there is logic to it…supply and demand. The number of shares available from DMRJ exceeds the demand for such shares from the relatively small universe of retail stockholders willing to invest in a promising, but heavily leveraged OTC stock that has an indeterminate amount of future dilution ahead of it. Maybe we are all geniuses or maybe fools, but most investors don’t have the degree of risk tolerance to purchase Implant right now.
Let’s be honest, the problem is one promissory note where the debt converts at a rate of eight cents for one share of Implant stock. It was originally for $5.6 million in principal amount, and is now $3.185 million in principal amount. The $2.415 million difference was converted into shares…around 30 million of them. That’s not so bad, and got Implant the time to mature to where it is now.
Currently, the 8 Cent Note has about $5.2 million owing on it in principal and interest, and could be converted into 66 million shares. To sell all of those shares before March 31st (the date the note is due, and the only date it can be repaid in full), DMRJ would have to dump about 702,000 per day. I just don’t think the volume is there to allow that many sales, and while they may not win any humanitarian awards, I don’t think they will sell to the point that the PPS is pennies (kind of bad for future business to destroy the company you “saved”).
Let’s say they dump an average of 200,000 shares a day until March 31st. That would be about 18.8 million shares, and reduce the interest owed on the note by $1.5 million. Not great, but if a refinancing takes out that note...for around $3.7 million…then (a) the dumping stops on April 1st, and (b) we are spared 46.25 million shares worth of dilution.
I am long and strong based on the technology. But if they merely renew the DMRJ facility rather than refinance on better terms, it’s a pretty clear indication that the company is being run for its lenders and its management, but not its stockholders.
AI
