My numbers as of 10/23/18 with weighted averages from 10-K:
462 million shares outstanding
40 million warrants at $0.11 weighted average exercise price
86 million options at $0.085 weighted average exercise price
128 million converts
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716 million shares fully diluted
So let’s assume good revenue news of $1,500,000 to be paid to QMC which increases share price to $0.12+.
Mad rush to convert and exercise everything outstanding.
462mm O/S + 128mm converts = 590 million outstanding shares,
but QMC has $0 convertible debt (converted) + $1.5 million in cash since it was not used to pay off any notes.
590mm O/S + 40mm exercised warrants = 630 million outstanding shares,
but QMC has $0 conv debt + $1.5 million in cash + $4.4 million from warrants (40,000,000 x $0.11).
630mm O/S + 86mm exer options = 716 million outstanding shares,
but QMC has $0 conv debt + $1.5 million in cash + $4.4 million from warrants (40,000,000 x $0.11) + $7.3 million from options (86,000,000 x $0.85).
So do I feel bad about the announcement of a revenue deal that causes a rapid increase in the number of outstanding shares to a fully diluted 716 million shares? Or even 750,000,000 shares? No.
Currently QMC has only 462,000,000 shares outstanding but nearly $0 cash and $3,500,000 in outstanding notes, most of which are due in the next six months.
Not a good situation in my option.
I would be much happier if QMC shows that someone is willing to pay something to start using their technology/product, even if that means the outstanding shares jump up to 750,000,000 shares; based on QMC having no outstanding debt, $13,200,000 in working capital, and confirmation that revenues may be coming down the road. That could hold the share price at or above $0.12 for quite a while. Better than the current $0.04.
Do I really think that all the warrants and options would get exercised if they were in the money? Probably not, I think the holders would continue to hold, unless they are coming up on expiration.
So maybe we just end up at 600-650,000,000 shares outstanding, but again no debt and maybe only $1,500,000 in cash. That would hold QMC over until well into 2019 when production revenues could begin flowing in.
