Explanation of potential convertible shares Found this post it explains the Potential of Diluted shares well.
There are 120,000 warrants for common stock expired 3/31. However, the warrants for Series B convertible shares (the ones you saw at $3) have another 1.1 years to expiration. The thing to remember about the convertible shares is that they convert into 20 shares of common stock, so that $3 conversion price corresponds to $0.15/sh for common. There are 3.21 million of those, which correspond to 64.2 million shares. In addition, there are already 1.276 million Series A and 5.307 Series B convertible shares out there, as well as 1.25 million Series C convertible shares. Those add up to 156.8 million shares waiting to be converted -- and those don't expire (they aren't warrants). The 64.2 million from Series B warrants would be on top of that, I'm afraid, taking the total outstanding to around 250 million.
There are also 25,000 warrants for Series A shares that convert at $4.00, which amounts to 500,000 common shares at $0.20. That's a drop in the buck and of no concern. But I plan to start using 250 million as O/S in anticipation of a share price over $0.15 that induces conversion of the Series B warrants. On that basis, their annualized profit (based on the trailing 9 months) would be around $0.02/share, so even with all of those conversions and exercises of warrants, they are still grossly undervalued.
