Dulution factor
First, let me me say that when calculating dulution factor I think most people calculted it incorrectly.
Lets say one has 10,000 shares in a company that has 100,000 shares or 10%. The issue 100,000 more shares. Now you have 10,000 out of 200,000 or 5%. You have been duluted by 50% or you lost half of your percent of ownership. If they issued 300,000 or shares then there are 400,000 shares and you have 2.5 % of the company. This would be a 75% dulution factor because you have lost 75% of your owner ship. But to be 75% the total number of shares had to 4 times the starting.
The number of shares issed, options, and warrents was around 50 million ( give or take a million these are as of Dec 31 2005) so for a 75% dultion factor there would have to be 150 Million new shares.
I would be a little upset if the dultion factor was 75%. ( I think it is closer the the 39% that I calculated earlier) I understand that the odds of success are greater with this purchase but the payoff is also less.
Second, a couple people have comment about 5 milliom dollars in the bank. Is it not 20 Million?
Financing terms for the acquisition include a three-year Senior Debt facility for $40.6 million from Laurus Master Fund, Ltd, $35 million of which was used to close the acquisition. The facility carries interest rates of prime plus 2.5% and 30% warrant coverage. Blast has also entered into a private placement with members of the selling group to purchase 15 million shares of common stock at $1.00 per share. This placement includes 33% warrant coverage
40.6 Million - 35 million = 5.6 million
Plus 15 Million = 20.6 Million
I know that these calculations are rounded and just guesses but I think they are some what close.
