Industrial Enterprises of America Inc fka IEAM

[linuspop]

Looks like people agree. I like how they broke down what accounted for the ballooning sharecount. I can understand the the shares issued for conversion of debentures, as well as the shares issued for warrants and options. But "the liquidated damages and green shoe penalties were agreed to by the company in order to convince convertible debt holders to convert their notes into shares" seems unusual and excessive. (?) Also, the 1 millions shares for finder's fees and grants seems like a lot to me.

Hopefully today begins a shift towards more transparency with Redmond as President. I have lessened the amount of IEAM I own, but this is still a large position for me. Willing to ride it out and holding my remaining shares with bated breath....


"The company will experience a net loss in the fourth quarter due to derivative and interest expenses as has been consistent throughout the fiscal year. It is expected that these expenses, with the conversion of most of the convertible debt, will be significantly lower during fiscal 2008. Also, as mentioned in the prior press release, the shares outstanding increased during the fourth quarter from approximately 13.3 million to approximately 19.5 million shares outstanding. During the quarter, approximately 2.8 million shares were issued for the conversion of debentures, approximately 1.4 million shares were issued for the exercise of warrants and options, approximately 1.0 million shares were issued for liquidated damages and green shoe penalties, and approximately 1.0 million shares were issued for finder's fees and as employee stock grants. The liquidated damages and green shoe penalties were agreed to by the company in order to convince convertible debt holders to convert their notes into shares of stock of the company. These amounts were not previously disclosed as they were too contingent to value. The cash that was generated from operations and from the warrant and options exercises was used to pay down the existing credit facility at the Pitt Penn subsidiary. The credit facility was inherited by the company during its acquisition of Pitt Penn last year. The company is in the process of replacing the credit facility with one that has more favorable terms to the company."