herbert, and Bry too, IMO when JF said to the caller their funding with shares was over he was talking about selling shares on the open market for day to day operating capital not drawing from the GGI pot. They have apparently sold enough shares on the open market to fill their war chests to carry forward through the next few months. We won't find out how much they sold until the annual comes out.
Now, that has nothing to do with the GGI package. We don't know if they have dipped into that at all and it has been said somewhere before that the first tapping of that would be only for a couple of million 75% of which to be used for inventory, 20% for advertising, and 5% misc.,
When they do decide to tap into the GGI bundle, on the day they get the cash they have to give GGI a debenture for enough shares to cover the cash. GGI can then convert that any time they wish to but we have been led to believe that GGI is in for the long term and is not going to be selling shares quickly, especially at these depressed prices. These are investors who want to see their money grow just as we do.
Now, the number of shares they receive depends 1st on the amount of cash we draw out and 2nd on which one of 3 formulas the situation dictates. Example, if we took out $1 million today, and if the pps is, lets say, .007. They Use the LESSER price of (1) $.020 or (2) 82% of the average of the 3 lowest volume trading days in the last 20 days or (3) 82% of yesterdays pps.
Continuing on with the pps example of .007. If they take out $1 million today, the number of shares involved will be the LESSER of (1).20 per share (Not applicable but wouldn't that be nice), (2).0043 which would be 82% of the average of the lowest 3 volume trading days in the past 20 (.0049, .0053, and .0055 from 10/14. 10/13, and 10/17), or .0063 which would be 82% of yesterdays EOD pps.
As it is to be the lesser, slanted in favor of the GGI, the price used would be .0043 as 82% of yesterdays would be .0063.
To get $1 million today we would have to issue them debentures for 232,558,130 shares ($1 million divided by .0043)which they can convert any damned time they are ready to. If we could get them for the .0063 figure from yesterday it would only make us give 158,730,015 shares so you can see how many fewer shares we have to give them the higher the pps.
With that in mind I am of the opinion we have people in Franklin who have some measure of intelligence, as well as their own self interests in mind, that they will dip into the GGI money as sparingly as they have to.
As I see it, the most we could draw out at todays price, and with only 4 billion registered shares (it's hard to say ONLY when talking about billions. Sounds like what our politicians do), and estimating we now have 1.5 billion O/S 9hopefully less), would be about $10.7 million and we'd be maxed out with all 4 billion shares O/S.
"The conversion price for the convertible debentures is the lesser of (i) $0.20, (ii) 82% of the average of the three lowest volume weighted average prices during the twenty trading days prior to the conversion or (iii) 82% of the volume weighted average price on the trading day prior to the conversion. Accordingly, there is in fact no limit on the number of shares into which the debenture may be converted."
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