And that number, 118m dilutive shares per annum, does sound good to you?
Notice that the number of shares to be converted remains constant no matter at what pps the stock trades. The higher the pps, the more difficult will be the absorbtion process of new shares into the float or the realization of a buy-back if truly initiated. If the company does not offer an alternative refinancing of the preferred's, you should aim for the lowest possible pps,instead!
Also notice that the shares owned by the CEO and other "early investors" are personal wealth. Yet, the true amount of funds that had actually been provided into the company in exchange for the privilege of holding preferred B's is unknown. Each preferred B share bears a par value of $2. In other words, $40M should have been raised upon the issuance of these instruments, an amount that can nowhere be verified on the finacial statements. And I would venture to say that $40M are not needed to start a local Title Insuarance firm. At current market prices the B's are still worth $72M (and they were worth $360M-$400M at the time ANDI, aka TITL, went public).
I won't even discuss whether it is equitable that an app company is left to bear the initial funding of an insurance firm, which in turn got privatized at no costs to the owner. But unless the early investors provided a fair amount of funding in the amount of $40m, the conversion privilege constitutes a cosntant transfer of public wealth into private wealth for the foreseeable future. That transfer can be direct via sale of shares to retail investors (increasing the float by up to 118m shares per year by your numbers) or indirect via the repurchase of shares by the company in exchange for other net value enhancing projects that must be foregone. The same process can watched daily at large on Wallstreet: Gains are privatized, losses are socialized.
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