I think investors are trying to come to grips with the effect of this financinhg.
CTGI has authorized 80m shares of which about 42M are outstanding
The maximum dilution for the four $1.5M notes is about t
714,000 plus shares or about 3 M shares
The company did not pay a 10 - 15 broler's commission or placement for this financing as they wold have to pay for LTC 's IPO
Even many middle market established companies are having
difficulty getting financing today that are making money
Right now neither CTGI nor LTC have any revenues the
fact that they were able to get the convertible stock
to be converted at a price of $2.10 rather than $.20
should speak loudly about the future prospects of our company
Evidently DR and company thinks that the return on investment
will surpass what they will have to pay them back in shares
If the shares are below $.38 then CTGI can simply buy backkc the shares at 118% of the dollar amount converted
If the stock price falls below $.25 then that is an event
of default 6 months from now
Evidently DR and Co. think that the stock will not fall below $.25 within 6 months after they give them the money and if
La Jolla wants to get out they can convert at the lower of $2.10 or the stocks market price for 18 consecutive trading days
Evidently,DR and Company expect more than the stock price and the volume that we have now otherwise it would not be worth
the risk of dilutting the shares at these cheap prices
Does anyone have any further thoughts?
regards,
bbhuey
man
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