MasterPicker, are you aware of the additional warrants and options that were previously anti-dilutive for WPCS?
First, here's the guidance from the company (which was BURIED in an 8-K filing, so kudos for digging that out):
On June 8,2005, the Company disclosed certain financial information to an
institutional investor. The disclosed information was as follows: As the
business continues to grow, the Company believes that it can generate revenue of
approximately $50 million, net earnings of $2,3 million and earnings per share
of $0.58 for the fiscal year ended April 30,2006.
Assuming a reasonable tax rate, the projection of 0.58 implies fd share count of 3,966,000. In the last Q, they company had an avg fd share count of 3,462,000.
They also have the following warrants and options:
"For the three months ended January 31, 2005, 369,926 stock options and 2,509,121
warrants were not included in the computation of fully diluted earnings per
share, because the stock option and warrant exercise prices exceeded the market
price of the common stock and, therefore, the effects would be antidilutive. The
assumed conversion of the remaining 24,098 stock options resulted in a 4,059
share increase in weighted average shares for fully diluted earnings per share."
The conversion price for the warrants:
"Each warrant is exercisable for a period of five years at a price of $8.40 per
share, subject to certain adjustments. The exercise price of the warrants is
subject to adjustment for subsequent lower price issuances by the Company, as
well as customary adjustment provisions for stock splits, combinations,
dividends and the like. The warrants are callable by the Company, upon 30 days
notice, should the common stock trade at or above $25.20 per share for 25 out of
30 consecutive trading days. A maximum of 20% of the warrants may be called in
any three-month period.
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We won't see the full impact of the warrants until the stock price avg is solidly above 8.40. I wonder how much of the warrant shares were figured into the the guidance?
AI
