"the rats get their payment shares at a discount to the
market, which leads me to believe that to follow your
suggestion might be the equivalent of buying high and
selling low. not smart."
Heavens to Murgatroyd, palacian, on the question of ways to deal with the "sewer rats", there's surely a ranking of ways that are best for the existing common shareholder of Biophan. I would suggest these are:
1) Pay off the the "sewer rats" with cash. While Ms. Hotchkiss has suggested this is not possible, the DEF 14A filed last month seems to leave this possibility open:
"the Company may not have enough shares of Common Stock authorized and available for registration to permit the full exercise of all issued and outstanding warrants or the full conversion of convertible instruments currently outstanding or may have to pay current interest on its Senior Secured Amortizing Convertible Notes in cash, rather than by delivering Common Stock"
The filing goes on to argue that BIPH prefers to dilute its shareholders by a further 357% and have a mass sell-off at the beginning of every month, because:
"it allows the Company to conserve its cash for corporate purposes."
The question arises, precisely what "corporate purposes"? According to the last 10Q, they still had $5.6 million of the Medtronic firesale money on hand. That should be enough to pay the interest on the debt in cash and progress the Myotech CSS development program (which still remains 24-36 months away!)
2) If it is true, as Ms. Hotchkiss has claimed, that BIPH have to pay the "sewer rats" in warrants and/or discounted shares, then I adhere to my suggestion that it would be better for BIPH's shareholders and indeed for BIPH's integrity, if it were to buy these shares back on the open market, and use these to discharge their interest payment obligations.
It might be buying slightly higher than one is selling, but at the same time, share buy backs cause the pps to rise, hence reducing the number of warrants and discounted shares they would be "forced" to pay. Better they come from the existing float than at the expense of the existing shareholder, surely?
Most importantly they wouldn't have to dilute existing shareholders at all, and that in itself would be a good thing. They would be making a public statement of confidnce in the future of Biophan, which would be extremely significant.
3) The very worst option is to mint new shares and use those to attempt to pay off the interest debts.
When governments do this, it leads to hyper-inflation and eventual economic catastrophe, as I suspect you know.
When individuals use their credit cards to pay off other credit card bills, it leads to Skid Row.
When penny stock companies do this, it leads to MegaDilution and eventual bankruptcy.
It would be turkeys voting for Thanksgiveing for any existing BIPH shareholder to believe that allowing Biophan to issue another 625 million shares in addition to the 175 million already out there is good business practise. It's not only damaging, it's hugely unnecessary.
You ask:
"what's the telemarketing about? i hadn't heard."
As a shareholder, I would have expected you to read the DEF 14A more carefully (I missed it orginally too, but then I'm not a shareholder, and never will be). I heard about it from private emails, but when I looked at the DEF 14A, it's all there:
"Employees and agents of Morrow & Co., Inc. will solicit proxies, and will request beneficial owners of our Common Stock to instruct their banks, brokers, and other custodians, nominees and fiduciaries to deliver proxies, using the mail, telephone and other means of electronic communication. The fees and out-of-pocket expenses of Morrow & Co., Inc. are estimated to be approximately $50,000 and will be borne by the Company."
Interesting that $50,000 would be almost enough in itself to meet one of the monthly interest payments.
I think BIPH's management has a very strange sense of priorities just now, and I'm surprised that anyone could disagree, no matter what their opinions of my view of the company.
Voldemort2001
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