jam, I found the post. here it is-
400,000 shares at .03. For example, the price goes over .03, they short 50 million PBLS at .032 and will use the coversion clause to cover with 3 cent shares. The price falls to .012. Instead of using their 3 cent shares, they buy 50 million shares at .012 and cover.
[50 million shares times (.032-.012)] = $1 million. Rinse and repeat a few times and you end up with more than $4 million. (The amount you would get after 5 years).
Note that their option to buy shares at .03 is a hedge against a price spike. If the price goes above .03 then they cover with converted shares. If they can manipulate a few swings in the share price then they cover with cheap shares they buy in the market. Pretty much a risk free gain.
I'm not certian this is what is happening but it is consistent with the trading pattern we observed from .034 to .012. Also the odd trading around .012 and .034. The 400,000 preferred are worth $10 each so they convert to to 133.33 million common. If those are series I preferred it doesn't say anything about 1 to 1 conversion.
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Posted by: Renavatio
In reply to: Jambamboo who wrote msg# 42456 Date:6/20/2007 11:31:20 AM
Post #of 43398
Jam-
Keep in mind that the "convertible preferreds" were for PBLS, LLC. Still don't understand the relationship between PBLS, LLC and Phoenix except that inmy business we create LLC's for each development project in my business to of course limit liability to our parent corporation. Of course, my LLC's aren't formed in Nevada and can't sell stock, whether preferred of common (yet). This is the court docs on St Tammany Clerk of Court.
1591414 – Tchefuncte Harbour – Mortgage – 11/22/2006 – Madison Realty Capital did the financing for the deal., PBLS borrowed $6,500,000 to buy out the rest of Harbour Townhomes.
1591412 – They bought the entire complex for $11,000,000, with $3.4 million paid up front. First Option: Gives Harbour Townhomes LLC the option to purchase up to 400,000 preferred shares for $10 per share for a total of $4,000,000. HT has the right to sell any and all of these shares back to PBLS for $10 a share after 5 years. OR Second Option: Can convert up to 15% of the 400,000 shares per year to common stock after 1 year from November 22, 2006 for the price of common shares of PBLS and in no extent can the option be exercised if the price is less than $.03.
1591421 – PBLS assigns the leases and rents for Harbour Townhomes to Madison Realty Capital as security for the $6,500,000 loan.
Ren
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