Rim Semiconductor Company (fka RSMI)

[spokeshave]

Hound: Re: In my opinion, the way this creates a lot of dillution is if the share price increases significantely to utilize the cashless option or the investors purchase the shares.

The warrants have very little potential to produce significant dilution. This is primarily due to the fact that the share price must go up significantly for that to happen. The history of this company has not given me any real confidence that the share price will go up significantly. I believe it will go up some, as the next orchestrated pump to benefit the FORs takes place, but I believe it will be short-lived and meaningless - as the last few have been.

The real damage from dilution will come from the floorless convertible debentures. Whereas the warrants are primarily window-dressing, the floorless debentures are the "meat and potatoes" of the financing deal. They *will* be converted, and they will be converted at the current share price at the time of conversion in "death spiral" fashion. There is literally no limit to the amount of dilution and share price decrease that will be caused by those toxic debentures.