•••>The very model of shareholder-friendly financing...
(and in all probability much of which will be used to retire the pre-existing toxic debt)
Here are several positives regarding the terms of the $3 million Series C Preferred share funding arrangement:
As has been pointed out, one positive is that the typical discount of 20% to 50% does not apply here, if/when conversions stemming from the (up to) $3 million in funding occur.
But there are a number of other positives with respect to the terms:
-Conversion price will be based upon the closing share price. I've seen conversion terms based upon the closing 'bid', or even worse, the trading low of the day. Since there's about a 50 percent chance of the stock closing at the ask, computing a conversion calc on the closing price increases the odds of a more favorable conversion value for the other shareholders.
-Conversion price will be based upon a 10 trading-day average. I've often seen conversion terms where the calc only considers the lowest X (3 or 5, for example) days within the period of measurement. By including all days within the 10 day period for purposes of any conversion calculation, it increases the odds of a more favorable conversion value for the other shareholders, since any up days within the full period will be factored in.
All in all, it seems as though the stated terms for the potential financing covered in today's after-the-bell 8-k are shareholder friendly. As always, simply my opinion.
'Each share of Series C Preferred Stock is convertible into $150 in fair market value of the Company’s common stock, which fair market value will be equal to the average closing price of the common stock on the over-the-counter market during the 10 trading days immediately prior to the delivery to the Company of a conversion notice'
STTK
