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RS Options/Warrants/PreferredsUpon closer examination it appears holders of options, warrants & preferred shares will get RS'd as well . I previously believed that some warrants and Preferreds might be immune but it looks like RS Amendment overrides any previous agreements - Effect on Outstanding Stock Awards; Stock Plans. If the reverse stock split is implemented, the number of shares of common stock subject to outstanding options, warrants, and our Series B Convertible Preferred Stock, as well as the number of shares of restricted stock issued by the Company, and the number of shares reserved for future issuance under the Company’s 2019 Employee and Consultant Stock Option and Incentive Planand 2019 Non-Employee Director Stock Option and Incentive Plan, will be reduced by the same ratio as the reduction in the outstanding shares. Correspondingly, the exercise price for individual outstanding options and warrants, on a per share basis, will be proportionally increased (i.e., the aggregate exercise price for all outstanding options and warrants will be unaffected, but following a reverse stock split such exercise price will apply to a reduced number of shares. Preferreds - currently 5,659 convertible into 7,545,333 shares of common or 1 Preferred is equal to 1,333.3 common . The chart states that Mort will still have 5,659 Preferred shares after the RS. So I'm interpreting that in a 1 for 10 RS for example , each Preferred would only now convert to 133.3 common . Warrants & Options look like a kind of double whammy from what I'm gathering. Not only does share # reduce but excise price is increased . For example if I have 100 shares that exercise at $1 the net effect to the company would be $100 . In a 1 for 10 RS I would only then have 10 shares but the excise price would then be $10 so EMAN still gets their $100 . So A - If there is no substantial news in the next few months to move the share price , it seems to me Mort & AWM would be better off soaking up some of these cheap shares . And as MW stated this whole business could be to force their hand and do something . and B - If a RS is made in concert with substantial news, the share price would be more attractive if the goal is to sell the company . This would align with Change in Control Agreements and the lack of the need for an Employment Contract with Sculley . But why even put an RS Amendment out there with those terms if Mort & AWM aren't already on board ? I'm leaning toward B . |
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Msg # | Subject | Author | Recs | Date Posted |
4726 | Re: RS Options/Warrants/Preferreds | iamgarce | 0 | 10/14/2019 12:10:40 PM |