Clarification of Thomas Page recent Form 5 Tranaction
Opinion of poster
By: rickj_65 11 Mar 2004, 10:11 PM EST Msg. 24647 of 24665 Jump to msg. # Clarification of Thomas Page's Transaction
The purpose of the Form 5 was to disclose Mr. Page's holdings now that he is a director of the company. Previously, the only indication of his holdings appeared in a 2/11/02 public offering prospectus (subsequently rescinded), where Mr. Page was listed with 2,000,000 shares designated as follows:
(i) up to 1,000,000 shares which may be issued to Mr. Page upon his conversion of a $100,000 loan made to us in connection with the Loan Transaction, and (ii) up to 1,000,000 shares which may be issued to Mr. Page upon his exercise of an outstanding warrant issued to him in connection with the Loan Transaction. The exercise price of the warrant is $0.10 per share. Other than having made the above loan, Mr. Page does not have a material relationship with the Company."
Since the recent Form 5 transactions didn't all coincide with the last disclosure, I had requested the company to clarify the new transactions which Jerry Newmin did.
The first 3 items in the Form 5 are Convertible Notes which Mr. Page received as part of 3 separate loans (aggregating $175,000) he made to the company in 2001, 2002 and 2003. My assumption based on the numerical values of the warrants are that they were $100K, $50K and 25K loans. As part of the loan agreements, he was granted 1,750,000 warrants (I'm assuming 10 warrants for every dollar based on the numerical values). Finally, the 250,000 options were granted to Mr. Page upon becoming a director of the company. They were priced according to the PPS at the time of his appointment.
To date, Mr. Page has not converted his loan into common stock; however, when he does it will relieve the company of $175,000 in debt and the warrant conversions will add $175,000 in cash. This will of course, dilute the O/S by 1.75 million shares, but won't be contributing to the outstanding float until he sells them.
Finally, I know there has been some commentary in the past about the "sweet" deal that many insiders have with regards to the the convertibles, warrants and options. This is generally made when an insider converts or files to sell some of their common stock. Keep in mind that these deals can only be perceived as "sweet" now because the company has made significant progress in their business and this is reflected in its PPS. At the time when the money was lent to the company, these financiers were taking huge risks with their capital and success was far from guaranteed. In fact, not until this past September were many of the derivatives in the money. Also remember that the majority of the loans were made prior to the Xenotech licensing deal and the Pfizer and Roche validations. Without these kind of convertible loans EXTI would never have been able to purchase Multicell - which is the reason we are where we are now. JMHO.
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