FrankSpeech Network Inc (FSBN)

[fibinacci]

Anselm, no chit sherlock. I've explained the conversion and warrant relationship many a times on this board. Do a search and you'll find them. So no need to explain it to me. The sentence: So whenever GZ needs cash, they knock on GGI and say, "could you please convert some shares for me, I'm broke (again)" was not to be taken quite literally. It was in lay man's terms. But note that the exercise of warrants and the conversion of stock are one and the same b/c both transactions must occur simultaneously and in "equivalent" amounts as your example demonstrates. But don't be fooled by the language, it is GZ who contols the cash flow despite the technical control of GGI.

Oh, btw, since we're nit picking.. "could you give me some money, i give you some additional warrants according to our agreement". Not quite. The warrants were given a long time ago, it is the exercise of these warrants that provides GZ with cash. So more correctly, "I need money, please exercise some warrants". In any event, GZ asks GGI for money, which causes the transaction to occur and results in the dilution of shares through the conversion.

Yes, GGI can convert at any time. But my argument has been that GGI is unlikely to convert more than what GZ needs converted (i.e. exercised warrants) at these price levels b/c it is increasingly more difficult for them to make a profit as the bid drops. Furthermore, if the buyers dry up then GZ and GGI are in a real bind since GGI can't push the price down further without loosing money. So the cash flow for GZ dries up as well, putting the business in jeopardy. GGI should be thanking those who pushed the price down to 0.0004 for them. That pretty much opened the flood gates for a little while.

I'm sure there are plenty of board members out there eager to say "told you so, GGI dumped at 0.0004 and so we're now trading at 0.0004". But, IMO, that isn't quite the way it played out. It saddens me to see this POS was unable to hold 0.0005 while I was on vacation, but people shouldn't believe GGI started the selling at 0.0004. IMO, GGI didn't start dumping until other players had established the 0.0004 range, which allowed GGI to make a profit at 0.0004.