Okay, my mistake on the new investors' rights to sell into the market securities immediately per section 4.1 (e) of the 8k:
(e) Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will not sell, transfer, assign, hypothecate or otherwise dispose of any Securities or any direct or indirect interest therein for a period of sixty (60) days following the Closing Date.
The company itself is also restricted to maintain enough shares for issuance to satisfy the amount of common stock that would be issued for conversion, that is subject to change dependent upon the common stock value, furthermore based upon the stated value of the preferred share price of $100 per share. The warrants for common stock that may be issued are subject to the R/S terms, but are also subject to recent closing prices of the share value. This also means that the more dilution they participate in, to the detriment of the share price would result in the necessity for them to maintain the shares necessary, at a minimum, for compensation of preferred stock conversion of their original investment. So no matter the math we attempt now, it can change within the next day, or week. So to avoid the impact on PPS that would effect the company to maintain a higher amount of shares available, the company is limited in their capability to dilute, as to maintain a high enough unissued share availability to satisfy these terms of the agreement. The company is also restricted from further private placement share issuance without approvals of Dr. Edery, and appointed board members, or risk further need to increase A/S issuance to maintain the preferred share control Dr. Edery and aggregate investors have purchased. So the company may have some share availability for issuance, but not without maintaining the proper amount to compensate investors until 2018. So this, in itself, limits their availability of shares to sell into the open market. It is a variable price rate, not only fixed to the amount of shares currently held. So go ahead and crunch the numbers every day, if you would like, but the restrictions are still in place to avoid such ostentatious dilution actions. If the company were to commit such action, then we would get proper notification of new registration of securities for an increase to A/S. The preferred share allowance for new investors is not necessarily a "moot point" either, considering the possibility of higher investor purchase that would require even more shares to be retained by the company for the case of any further conversion requirement. Also, if any investors were to liquidate shares, it would also entitle the other parties involved the same conversion price calculated for the purpose of conversion and sales. This, too, restricts the company from being foolish enough to dilute common shares into the open market that may risk further loss of value to investors, that they would be forced to compensate. Also, the fact that Edery maintains 3 members on the board (unless he sells below 25% control) assists in protecting his investment in management and fund raising decisions. Either way, if they decide to dilute and force an increase in S/S, then we will be notified of this occurrence by filings. There is always the possibility, but the controls in place decrease the probability of such actions.
I apologize for the delayed response. I had some other business to tend to this morning.
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