My calculations on dilution were correct.
My math checks out.
Conversion price was $0.52.
$750,000 / .52 = 1,442,307 shares.
This is the number of shares that actually converted a few weeks ago.
As you all know the old float was 17.7M shares.
1,442,307 (new shares) / 17,700,000 = .081 which converted to a percentage is 8.1%. The reason someone thought it was less than 1% was probably because they made an error in converting a decimal to a percentage.
If they had not changed the provision the conversion price would have been roughly $1.50.
$750,000 / 1.5 = 500,000
The difference in the number of shares is the dilutive impact of this change or 942,307 addition shares as a result of the change.
1,442,307 - 500,000 = 942,307
Now we just need to multiply the additional shares created by the current share price, I will use $3.00 here since that is what it was when they are converted.
942,307 * 3 = $2,826,921 which is the incremental amount of dilution.
In my article I said: "Based on the price of the stock today, the 1,442,308 new shares caused about $4.3 million worth of dilution on a stock that has struggled to keep up any volume. Conversely, if they had not changed this provision, and retained the more favorable terms already in the contract, there would have only been $1.5 million worth of dilution."
The $4.3M was calculated by multiplying the total shares converted with the share price and rounding down by $26,911.
1,442,307 * 3 = $4,326,911
The $1.5M from the article is based on multiplying the 500,000 shares under a conversion at $1.50 a share by the share price.
500,000 * 3 = $1,500,000
If you still have issues with my math could you please point of the specific area you see that I made a mistake?
