josh: Red flag - they have floorless convertible prefs outstanding. From the last K:
Series B 5% Cumulative Convertible Preferred Shares (Series B) ... Each share of Series B, having a value of $1,000, is convertible into shares of common stock at the lesser of $1.10, as amended, or 75% of market value. The mandatory conversion date of the Agreement has been extended to February 2003.
Series C 5% Cumulative Convertible Preferred Shares (Series C) ... Each share of Series C, having a value of $1,000, is convertible into shares of common stock at the lesser of $1.10 or 75% of market value, as defined.
175 Series B and 250 Series C were outstanding as of the last Q. A lot had been converted over the last year - obviously putting pressure on the share price, maybe an indication of shorting also.
At current price of 4.5c, the Series B & C represent potential dilution of at least 12mn common shares, as against the 31mn currently outstanding. But given that the conversion is floorless, dilution potentially much higher.
[In addition, as of last Q they had 124 Series A prefs (each converting into 222.22 common) and 104,000 Series D prefs (each converting into 3 common) outstanding. These are not floorless converts, but still represent potential dilution of
around 350,000 shares.]
Floorless converts = do not invest, IMO.
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