Thoughts/Comments? How much dilution are we really expecting? Is it ultimately good to convert preferred to common?
see below from CC:
David Silverman - Private Investor - Analyst
Hi, David Silverman, private investor. Gentlemen, my question is relative to the conversion of the preferred's. Are there any
restriction on the sale of these preferred's, or is it possible we could expect tens of millions of shares to be dumped on the
market?
Chris Dick - Elite Pharmaceuticals Inc - COO, President
Well, much like the D, they can choose to convert out into common and when they convert out, then they can choose to sell
or not sell the common and hold the common. Typically, for example, when the D did it they did sell when they were out there.
The B & C is not as large a number of shares. But, so, it's up to them and it really depends on how quickly they convert out too,
whether they come at one-time or over time when they do it.
And, I think, again, the good news for the common shareholders, granted there's more shares out there but when they get out
there, now they're in the class that you're in plus we're not paying dividends, quarterly dividends to them on an ongoing basis.
So, I do think ultimately it's good for the common shareholders to get the preferred shares converted now and done with
basically.
David Silverman - Private Investor - Analyst
Do you have an estimate of the number of common shares, let's say by the end of this fiscal year that will actually be outstanding?
Carter Ward - Elite Pharmaceuticals Inc - CFO
Yes, well, currently as of June 30, the B's and the C's represented roughly 4 million shares, common share equivalence, this is
as of June 30. And, the Series E was around 121 million or so common share equivalents.
Jerry Treppel - Elite Pharmaceuticals Inc - Chairman, CEO
It's not our expectation that the E's are going to--
Carter Ward - Elite Pharmaceuticals Inc - CFO
We're not expecting the E's to convert. And, also, this goes back to the proposal to increase the authorized shares. And, why it's
really important to point out that the increase in authorized shares is really just to accommodate what's already out there as
far as potential conversions of the preferred and the warrants being executed.
So, we need to have authorized available for that. And, I'd like to also note that the warrants that were issued to the Series E
shareholders are cash warrants. So, if they choose to execute those warrants, quite a bit of money would have to come into this
company, which would be a good thing.
AI
