SaviCorp (fka SVMI)

[flsunchaser]

Mike, You've touched on what's bugging me about all this potential dilution, how it works and how we will be affected by the dilution and the reverse split that will "fix" it. Timing is everything on this as you pointed out. Doing a reverse split (R/S) before Cornell has been taken out of the SaVi picture would only encourage Cornell to convert more warrants and sell the common stock in the open market for a gain, since a R/S will increase the share price. This would come, I think, after Cornell is out of the picture to get the shares outstanding back in line.

The R/S does not extend to warrants. It only extends to outstanding common shares. Also, the R/S does not extend to Series A or Series C convertible preferred shares either. As long as those A or C shares, held by management and some insiders like Alexander Haig and his son, are not converted to common shares, they will ride out the dilution from Cornell and the R/S that will follow. I guess that's why they call 'em preferred shares. How do you like that Mike?

As Bly has pointed out, Cornell got the warrants when they did the deal for the loan with SaVi last July. Now the 24 month loan with required payments of $225,000 per month, that was supposed to have started last November but hasn't and the warrants are two different things. They could pay Cornell off tomorrow and Cornell would still have the warrants. Getting the warrants or some of the warrants back would be a separate negotiation with Cornell and a separate payment. And how much would that payment be? According to the last 10QSB filed late in December, the loan aggrement dated 07/10/06 valued all the warrants according to the Black-Scholles Accounting Method at about $43,000,000. Cornell has the warrants, but when they convert, they have to pay SaVi the conversion price and then go out in the open market and sell the shares for a profit. I think, Cornell wouldn't even bother to convert unless the market price is higher than the conversion price, they have to pay to SaVi. You've seen that conversion table that says 1 billion at .003 and 1 billion warrants at .006. If all the warrants are converted according to that table, in the next five years, SaVi makes $33,000,000 along with getting a lot of dilution to it's market share price. So subtracting 33 million dollars from 43 million dollars and you arrive at $10,000,000. SaVi would have to pay Cornell $10,000,000 or more (or less depending on what Cornell might take) to get a rid of the warrants. And if they do nothing about the warrants in the next 5 years, except maybe say to us "I'm sorry, Mario did that deal, not me" SaVi will be $33,000,000 richer and a R/S will straighten out the float. As I mentioned earlier, holders of series A or C convertible preferred shares who don't convert to common shares, don't get hurt by the dilution and aren't affected by the R/S that'll put this back together again.

The only one affected is "us", the present common share holders. What would you do if you were in the company's position, do nothing and be $33,000,000 richer in 5 years or less or buy the warrants back from Cornell and be $10,000,000 or more poorer?

Here's another thing, the reverse split doesn't hurt us, it helps us (if were still holding SaVi shares then) because it will return SaVi's share price to a level where other investors will be inclined to buy SaVi and drive the share price up even farther. You've already gone down the tubes financially from the all dilution when the time has come for a reverse split. After the split you've got the same total value in SaVi shares as you had before BUT YOU'VE GOT FEWER SHARES. If you had a million shares before the split and the R/S was 100:1 you'll have 10,000 shares after the split. Meaning your dreams of becoming a millionaire by making a shrewd investment in SaVi Media Group, way back when SaVi was real cheap, will be, out the window, because the R/S took away all those shares you had.

Being a stockholder of one of these penny stocks can be complicated.

FlSun