NGAS Resources (NGAS)

[RonnieD]

start with Note 10 here:
http://www.sec.gov/Archives/edgar/data/746834/000095012310073329/l40439e10vq.htm

at the onset of 24 months in May 2010, the reduced note became convertible. According to the 8-K, this could continue through
November, which may be enough to convert fully. Conversion doesn't necessarily mean the new stock is being sold by the institutional noteholder. Often noteholders will short the stock in an effort to lower their conversion price which increases the number of shares they receive.
http://www.sec.gov/Archives/edgar/data/746834/000095012310090462/l40792e8vk.htm

See how the price drop started in May, which is exactly when
the note became convertible. Judging by the volumes on the chart
and the corresponding down days, we can ballpark estimate that
it should be getting close to full conversion of the 28 million
dollars.
When the noteholder is finished converting, whether they are
selling for cash or shorting, the stock will no longer be under pressure and can begin to reflect an equity closer to the book
value. Total assets over liabilities is $117 million. At current o/s of 40m that is $2.92/sh. If this completion of conversion corresponds with an increase in natural gas contract spot, the
stock will rally hard.