frog...Not sure where you're coming up with your numbers. The conversion price is initially set at 0.061. That covers the next six month period. So assuming that ALL private placement holders converted, that amounts to 163,934 shares per $10,000 invested, or 131,147,530 shares. Exercise of the warrants could add another 26,316,000 for a total of 157,463,530 shares. Of course, the total could go higher if future resets lower the conversion price for the units.
IMO, the pragmatic way to look at this is that these investors are buying shares at the same price we can buy them today. Bag8ger, if the price is $50 five years from now, your 0.06 shares will also be worth $50 each. Are you suggesting that their shares shouldn't be worth the same?
The protection they get that you don't is on the down side. If the market price declines, they will be insulated through the reset and the potential to convert at a lower price. They also receive the upside bonus of being able to excercise their warrants, but that will cost them another $2,000,000. I would point out that if you see events that lead you to believe the share price will advance beyond 0.076, you will be free to purchase additional shares on the open market at that time. Again, the only thing you don't get is the guaranteed right to purchase at that price.
This placement seems to me to do a pretty good job of protecting the investment of the existing shareholders. I would also say that if this allows the company to gain the necessary capital it needs, and to do it at 0.061/share, then that is alot better than some of the scenarios that have been floated on these boards recently. I have seen many suggesting that they would have to sell shares at 0.01-0.02/share. I was thinking myself along the lines of a 40% discount to market. I was happy to see 15%.
Lastly, the executive summary points out that there will be a total of six reset calculations. Since reset calculations will be made semi-annually, that tells me that whatever it is they are going to do with these funds, the results are expected within a three year window.
These are my initial thoughts. Feel free to respectfully disagree.
Later,
W2P
