PowerLinx Inc (PWNX)

[Francois+Goelo]

***¶*** Net Effects of PP, explained in Layman's terms...

Say, for simplicity of argument that SEVU has a maket value of $10 million with 20 million shares @50 cents, which is close enough to current reality...

Now, Outstanding shares will double to 40 million by virtue of a 20 million shares PP @ 10 cents/share... What will be the calculated value of the stock, the day after the PP becomes effective?...

a) New Market Value: Existing $10 million market value + $2 million PP funds = $12 million

b) New share value: $12 million divided by 40 million shares = 30 cents

****** There are 2 clear Results from that PP operation:

a) The Insiders who paid 10 cents have trebled the value of their shares and made the aggregate gain of:

20 million x (.30 - .10) = $4 million

b) The non-insiders whose shares were worth 50 cents before, have now lost 20 cents of that, or 40%... If we assumed that the non-insiders had 20 million shares (not exactly the case, because of McBride's holding), then they would have lost the $4 million that the Insiders have gained, as shown above:

20 million x (.50 - .30) = $4 million

Conclusion: this PP amounts to a NET TRANSFER of WEALTH from the non-insiders (us...) to the Insiders and Management to the tune of approximately $4 million...

This is exactly what I am objecting to, among other things and why I and other 4 shareholders will shortly be filing suit...

Just my Personal Opinion, F. Goelo + + +