A few noteworthy snips from the 10Q:
Convertibles total:
"As of January 31, 2002, the outstanding amount for the above notes was $927,500."
The following two statements appear to be contradictory and inconsistent. It appears that the first statement's reference to January 21, 2001, is a typo and that it should be 2002, but the amounts funded through 1-31-02 are inconsistent. I would not be surprised to see an amended 10Q fix these apparent inconsistencies.
On page 21, in Management Discussion:
"As of January 31, 2001, the Company had funded approximately $2,127,000 of the production costs towards this project, which included the purchase of camera equipment in the amount of $266,004."
On page 17, Note 9 to the Financial Statements:
"As of January 31, 2002, the Company has funded approximately $1,857,000 of production and other costs, which was included in projects under development in the accompanying consolidated balance sheet."
New stock after 1-31-02:
Substantial issuances after January 31, 2002 through March 14, 2002:
Options granted outside the plan 500,000
==========
Warrants granted in connection with
consulting agreement 300,000
==========
Options granted in connection with
2000 stock incentive plan 1,302,500
==========
Sale of common stock for cash 3,674,000
==========
Common stock issued to employees 485,000
==========
Additional shares issued under
settlement agreement 1,261,946
==========
Total 7,523,446
There also appear to be warrants for approximately 3,628,000 additional shares of stock that were not included in the 1-31-02 share data because they were allegedly anti-dilutive at that time. With the share price around $1.00, these warrants are no longer anti-dilutive and would now be dilutive. They include, from Note 8:
November 17, 2000 2,428,000 Lesser of 6.00 November 17, 2003
or 50% of market
($0.20 at 01/31/02)
October 31, 2001 1,000,000 .25 October 31, 2006
November 5, 2001 200,000 .51 November 5, 2005
Total 3,628,000
This 3,628,000 plus the 7,523,446 issued since 1-31-02 means an additional 11,151,446 shares to be counted among the "WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING" Thus, if "WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING" at 1-31-02 is 32,479,898 and there are at least an additional 11,151,446 to be counted in the current Q, then there are, at least, 43,631,344 shares outstanding.
The significant dilution is the bad news. The good news appears to be that they are still raising money, albeit at what appear to be greater discounts to market and thus at a proportionally larger dilutive level. Although cash had dropped at the end of 1-31-02, it looks like they raised some decent cash in February and early March.
Of course, if the share price remains around $1.00, future money raised will be less relatively dilutive and the number of shares required will also be a progressively smaller percentage of currently outstanding shares. That is, 1,000,000 shares is a greater percentage of 30,000,000 shares than it is of 44,000,000 shares.
Troy
Troy
