Bioelectronics Corp (BIEL)

[kidnova]

Yes, they own common shares and the value of the shares they own declines when the pps drops, just like everybody else's shares. Let me explain what I meant.

Members of the Whelan family own substantially all of the debt of the company which is clearly stated in the financial statements. And, when dilution occurs it is almost always to convert debt. Let me show an example.

Let's say this is the state of things today:

Total OS = 1.5 Billion
PPS = $.01
Whelan Family Holdings = 500 million shares

So, let's say they decide to convert $150,000 of debt into equity at market price. Typically the conversion is at a discount to current market, but let's just say they issue shares at $.01 per share.

$150,000/.01 = 15,000,000 shares issued to pay down the debt, which equals 1% of the total outstanding shares.

Now, let's say the pps declines in a 1:1 ratio with the amount of dilution, or 1% to .099. That means common shareholders, like yourself, lost 1% of the value of their investment.

Let's look at what happens to the value of the Whelan's holdings.

Before Dilution: 500,000,000 * .01 = $5,000,000
After Dilution: 515,000,000 * .0099 = $5,098,500

So, yes, on a per share basis, the price went down, but they are now holding more shares at the lower price so the value of their total holdings has increased. That's what I meant when I said additional dilution really only hurts the common shareholder. I hope this clears up my statement.