Replies to post #5667 on Jiangbo Pharmaceuticals, Inc.(fka JGBO)

[jjohnson]

Somewhere in the debenture deal details there are provisions that allow the company to automatically convert the debentures if the share price exceeds a certain amount. I think for the $8.00 convertibles it's $11.50 and for the $10 ones it's $13.50. That's the protection against Pope earning a ridiculous amount for their loans. If I have time I'll comb through some SEC docs again and find where it's stated. I think it was in the last 10Q.

[ericteg]

Thanks very much for the explanation.

I read through all of the discussion of the debenture in the the filing, trying to understand how many shares could potentially be added to the current 10+ million shares outstanding, if the debentures were converted, thinking that is why they had to show the fully diluted earnings as a much smaller amount. But by that reasoning, cutting the EPS in about half (from 0.86 to 0.44) implied that the outstanding shares would roughly double if the debentures were converted.

Based on your answer, I now understand that they are withholding a sum of money from the net income (roughly 4-5 million $US) to calculate the fully diluted EPS, rather than adjusting the shares outstanding. But just to be clear, at what point in time can they stop doing that on their income statement, and show the basic income as the fully diluted income? Is it when the debentures become due?

I fully appreciate and agree with your point that the main concern for us as shareholders is the PPS, but coming at it from the standpoint of potential investors evaluating the company and buying in, obviously the higher the EPS, the better chance of getting the PPS to go higher as well. Of course, if these potential investors do their due diligence, and go beyond just looking at the diluted EPS and P/E, then they would understand that the company is earning a lot more money than superficially meets the eye.

Thanks also, long, for the analysis of the effect of uplisting, and the discussion of the moving averages. It looks like the patience of the long-term "strong buy" crowd is finally beginning to be rewarded.

Regards,

Eric

[bigplay777]

Long Jiangbo is geting more exciting everyday. I know your a seasoned investor and understand very well, but I've never really appreciated the POPE investment until now. Thanks for you insight.

One question about renegotiation on the notes: What's POPE's incentive to renegotiate?

bigplay777

[996]

Long, I don't understand why you say "and not one single share dumped into the float". To my understanding (which I will admit isn't the best) of the debenture-details, Pope and Ardsley can excercise warrants whenever they want to. So why wouldn't they excercise these in the coming weeks/months, buy shares for $10 and sell them higher because the pps is above $10 now?

But maybe I am overlooking something...are warrants only excercisable when certain conditions are met?

These are the numbers on both deals as I see it:



Re-negotiate or re-finance would be good, do they have the option to just repay the loan and stop warrants from being excercised? I don't know for sure.