UVCL: Deathspiral Financing 101 Class. In detail explained in the latest 10-K from 4/30/2004. And yes, the debenture has maturity dates between March and May 2004, so at latest End of May it will be finished. And looking at the bounce it could be done by now.
From the filings, this is the key sentence:
"Of the total amount of convertible debentures originally issued, $252,933 remained outstanding as of December 31, 2003. Based on the closing price of $0.0145(typo in the filing says 0.145, but corrected in the next paragraph) on March 31, 2004, and the 86,862,882 shares outstanding as of December 31, 2003, the remaining debentures would be convertible into 24,919,507 shares of common stock, or approximately 22.3% of the common stock. "
And on top of the filing, it says:
"As of March 31, 2004, there were 103,892,733 shares of the issuer’s common stock, par value $0.0001 issued and outstanding. Of these, 80,872,226 shares are held by non-affiliates of the issuer. "
86,862,882 o/s on dec 31st 2003 24,919,507 shares from the CD to be converted were left on dec 31st 111,782,239 is the fully diluted o/s when CD is finished.
On March 31st 2004, more then two thrirds of these remaining 24M shares from year end 2003 were already Converted and might have hit the market:
O/S Fully diluted - O/S March 31st = Remainder CD for April/May 2004 111,782,239 - 103,892,733 = 7,889,506 shares left to be converted as of March 31st 2994.
Those were dumped In April, looking at the chart, and imo. Seems to be done, but no guarantee. Gotta call the Transfer agent.
Here is the filing:
Private Placement of Convertible Debentures
From March through May 2002, we sold convertible debentures in the aggregate principal amount of $650,000 in a private placement offering. The debentures originally bore interest at the rate of 6% per annum, and mature on the second anniversary of their issuance date, unless earlier converted into common stock of UniverCell Holdings at the holder’s option. If not earlier converted, the debentures will convert automatically on their maturity date. Both principal and accrued interest is convertibleThe conversion rate is based on the lesser of:
• 200% of the closing bid price per share of our common stock on the date of sale of the convertible debentures; and
• 70% of the lowest closing bid price per share of our common stock for the 20 trading days immediately preceding the date of conversion.
On December 26, 2003 we issued 1,049,015 shares of common stock in payment of all interest then accrued, as well as future interest.
As of December 31, 2003, all but $252,933 in principal and interest had been converted. The number of shares of common stock into which the remaining outstanding principal amount of the convertible debentures is convertible into cannot be determined at this time because the conversion formula is based on the future market price of the common stock.
We engaged a placement agent, H&W, in connection with this private placement offering. After payment of the placement agent’s fee (which was 13% of the principal amount of the convertible debentures sold, or $84,500), we applied the net proceeds of the sale of convertible debentures to working
They announced it also in the risk disclosure. Info was all there, not good for those who were long since .17, lol...
Factors Affecting Our Common Stock
Conversion of the convertible debentures will substantially dilute our stockholders’ equity.
We sold our convertible debentures in the aggregate principal amount of $650,000 from March through May 2002 in a private placement to accredited investors. An aggregate principal amount of $315,000 of these debentures was issued on March 27, 2002, an aggregate principal amount of $285,000 was issued on April 30, 2002 and an aggregate principal amount of $50,000 was issued on May 7, 2002. The convertible debentures bear interest at the rate of 6% per annum, and mature on the second anniversary of their issuance date, unless converted into our common stock at the holders’ option. The conversion rate is the lesser of:
• 200% of the closing bid price per share of our common stock on the closing date; and
• 70% of the lowest closing bid price per share of our common stock for the 20 trading days immediately preceding the date of conversion.
To the extent not previously converted at the holders’ option, the convertible debentures will convert automatically into common stock on their maturity date.
Because the number of shares into which the convertible debentures are convertible depends on both the closing bid price of the common stock at various dates in the future and the amount of accrued interest at various dates in the future, we cannot know as of this date how many shares of common stock are issuable upon conversion of the convertible debentures. For illustrative purposes, the following table indicates (as to the debentures issued on each issuance date) the number of shares of common stock that will be issuable on the maturity date of the convertible debentures, with various hypothetical values ascribed to the closing bid price of the common stock. These hypothetical bid prices are not intended as projections, estimates, predictions or indications of the future performance of our common stock, but rather are provided to illustrate the impact of varying pricing levels on the holders of our common stock due to the conversion of the convertible debentures.
Of the total amount of convertible debentures originally issued, $252,933 remained outstanding as of December 31, 2003. Based on the closing price of $0.145 on March 31, 2004, and the 86,862,882 shares outstanding as of December 31, 2003, the remaining debentures would be convertible into 24,919,507 shares of common stock, or approximately 22.3% of the common stock. correct bid price was .0145, typo
There is no upward limit on the number of shares of common stock issuable upon conversion of the convertible debentures. The table above illustrates the number of shares issuable upon conversion if the lowest market price of the common stock for the 20 trading days prior to conversion is near or above the current market price of the common stock. For example, on March 31, 2004, the closing bid price of the common stock was $0.0145. If the market price of our common stock does not increase prior to conversion, it is possible that a substantial additional number of shares of common stock will be issued upon conversion of the convertible debentures.
We discuss below certain factors with respect to our convertible debentures that we believe are material to an investor’s decision to invest in our common stock.
Conversion of the convertible debentures will substantially dilute our shareholders’ equity.
As we issue more shares of common stock, the proportion of equity that each share represents will decrease. We will continue to issue additional shares on conversion of the remaining outstanding convertible debentures. When we issue these new shares it will further dilute the equity represented by each existing share of our common stock. The economic value of each share of our common stock will decrease, and the market price of the common stock is also likely to decrease. The debentures convert at a floating rate which is below the prevailing market price of the common stock. The lower the market price of the common stock, the more shares that are issuable upon conversion. If the debenture holders convert a portion of the debentures and the market price of the common stock decreases due to the dilutive effect of this partial conversion, then the remaining unconverted debentures will represent a larger number of shares of common stock, which would cause additional dilution and could further depress the price of our common stock.
The owners of the shares of our common stock that we issue on conversion of the convertible debentures will be able to trade them at any time. If and when these owners sell their shares, there could be an immediate and significant downward impact on the price of our common stock, as the market will react and adjust to these additional shares.
If holders of the convertible debentures exert downward pressure on the market for our common stock, then the number of shares represented by the convertible debentures could increase.
Because more shares will be issuable upon conversion of the convertible debentures when the common stock is trading at a lower price, the holders of the convertible debentures have an incentive to keep the trading price low. To keep the price low, they might convert some of their convertible debentures, resulting in the issuance of additional shares of common stock into the marketplace, or sell our common stock in short transactions, or a combination of both.
In a short selling transaction, a person agrees to sell shares in the future and a buyer agrees to purchase shares from the seller at a fixed future price. The short seller is essentially predicting that the price of the stock will be lower when the future sale occurs. This may suppress the trading price of the stock because the market will perceive short selling as a lack of confidence in the value of the stock, since the short seller will only make money on the sale if he or she can buy the stock for a lower price than the agreed short sale price.
Furthermore, because investors may perceive that we may be issuing additional shares due to the conversion of the convertible debentures, the market price of our common stock may not rise when it otherwise might. This perception might hinder our ability to raise capital.
Future sales of common stock or other equity securities could adversely affect our stock price and dilute our stockholders’ interest.
We may issue additional capital stock separately from the issuance of common stock upon conversion of the convertible debentures. We may do this in future financing transactions, in future acquisitions or as incentive compensation for our executives and other personnel, consultants, and advisors. Issuing any equity securities would be dilutive to the equity interests represented by our then-outstanding shares of common stock. The market price for our common stock could decrease as the market takes into account the dilutive effect of any of these issuances.
Sold down..... ready to go with a few more shares in the float now, gotta consider that fact. Will probably move slower. Also depends on if the CD have sold their shares yet or if they only converted at a low level and holding part of the shares to dump higher? We dont know that.
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