stock,
What will our price be when the conversion takes place is the question. I suspect that big 80,000,000 share trading day before the Statnome news was Dutchess covering their short positions.
In order to continue to use our $35 million funding facility with Dutchess
Equity Partners to fund our operations and complete future acquisitions, during
April 2006 we filed a registration statement to register 600,000,000 shares of
our common stock for this facility. The registration statement was declared
effective on May 1, 2006. On September 14, 2006, we filed a registration
statement to register 260,281,228 shares of our common stock of which
175,000,000 shares were for the shares underlying the convertible debentures
held by Dutchess and 45,000,000 shares were for the shares underlying the
convertible debentures held by La Jolla. The SEC is in the process of reviewing
this filing.
The Dutchess Agreement provides that we from time to time may deliver a notice
to Dutchess that will state the dollar amount of common stock that we desire it
to purchase. The maximum amount permitted pursuant to any such notice is
$600,000, and we can give approximately three such notices per month. Upon
receipt of the notice, Dutchess is obliged to purchase the dollar amount of
common stock set forth in the notice at a purchase price equal to 96% of the
average of the two lowest closing bid prices of the common stock during the five
trading days after the notice. We are not permitted to provide a notice to
Dutchess, and Duchess is not obliged to purchase any of our shares, in the event
that we do not have sufficient authorized shares available for purchase to
fulfill such commitment. In accordance with the outstanding notes we issued to
Dutchess, we are required to use 100% of the proceeds from these puts as payment
on the notes.
