HrH: No, I did not set you up and that poster has not taken the entirety of the financing covenants into consideration.
This is all very complex and it's hard to anticipate every question. That's why I invited more questions for clarification.
Reagarding the maximum number of shares, I stated the following:
" The only thing that prevents this from being a classic death-spiral (such as the horrific Series C in 2000) is that the covenants state that conversion price shall not be lower that $0.19 unless the company offers any common shares or common share equivalents (debt, etc.) to any party below that price. If that happens they could become the worst of the worst."
With a floor of $0.19 in place, the company was able calculate the maximum number of shares that needed to be registered including share to cover interest and warrants.
However, IF the company offers common shares to anyone at less than $0.19, the number of maximum shares would be larger (the filing explains this).
To accomodate that situation, e.Digital would need to register more shares, which would involve a proxy request for more authorized shares since it has pretty much registered or reserved all of the 200 million authorized shares.
Therefore, by stating that there was a floor of $0.19 in the covenants, I acknowledged that there was a maximum number of shares needed. However, what my critics ignore is that the $0.19 floor can be removed if e.Digital offers stock below that price. Then it is a whole new ball game.
There is so much more to this (part of it includes other financings) that I don't want to get into more detail than necessary for people to get the gist. However, I am willing to debate the facts with any other poster, even if we have to do it via proxy as I would not be allowed to post on agora and many of my critics have lost their privelege to post on iHub.
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