The conversion of the preferred shares by Discover
Post# of 15624
(Total Views: 697)
Posted On: 04/22/2019 7:54:00 PM
The conversion of the preferred shares by Discovery should not come as a surprise to anyone. We have discussed this at length. We've also known that the lower the share price, the more common shares have to be issued.
Here is what we know:
• As of Feb. 6 record date there were a total of 165,579 common shares outstanding.
• As of Mar. 1 there were 450 Preferred shares still outstanding.
• The current number of common shares outstanding are 187,020,957
• On Feb. 22, March 6, March 19, and April 11, Discovery converted 30 Preferred shares and the company issued them 26,688,515 common shares. They were issued but not registered!
• With regards to the 5% rule, Discovery does have the option to increase their stake to 10% upon giving the Company prior notice.
• Some may have noticed the number of outstanding shares increased quite a bit in the last few weeks. I'm not sure if the current total outstanding includes any of the 26 mil + shares issued. I suspect it does include some of them.
• All of the preferred shares were converted and issued during and before the Company was contemplating a R/S.
Here is a reality check:
• There are still, based on my count, 410 Preferred shares that could still be potentially converted by Discovery and/or redeemed by the Company. This equals to $4.1 Million.
• Applying the same rate of conversion to the remaining Preferred shares would require the Company to issue another 380 Million +/- shares to Discovery.
• The Company has a total of 500 million authorized shares. At some point there will not be any more shares they can issue.
• The above may very well justify the need for a R/S, if only just to make more shares available for issuance.
• For both conversion and redemption, the Company has the option to pay Discovery with cash that they have on hand. Obviously if the Company goes this route they will deplete their remaining cash before the end of the year.
• For added drama, because the Company has already breached the terms of the agreement, Discovery has the unilateral right to be repaid in cash for any redemption of the shares by the Company.
They say that necessity is the mother of invention. This is just an opinion, but I think if anything this is a reality check for the Company as well. It will force their hand to act. The status quo is not going to work. Don't be surprised if we are approached again. This time with a proposal that is more definitive and one that we can live with and support.
Here is what we know:
• As of Feb. 6 record date there were a total of 165,579 common shares outstanding.
• As of Mar. 1 there were 450 Preferred shares still outstanding.
• The current number of common shares outstanding are 187,020,957
• On Feb. 22, March 6, March 19, and April 11, Discovery converted 30 Preferred shares and the company issued them 26,688,515 common shares. They were issued but not registered!
• With regards to the 5% rule, Discovery does have the option to increase their stake to 10% upon giving the Company prior notice.
• Some may have noticed the number of outstanding shares increased quite a bit in the last few weeks. I'm not sure if the current total outstanding includes any of the 26 mil + shares issued. I suspect it does include some of them.
• All of the preferred shares were converted and issued during and before the Company was contemplating a R/S.
Here is a reality check:
• There are still, based on my count, 410 Preferred shares that could still be potentially converted by Discovery and/or redeemed by the Company. This equals to $4.1 Million.
• Applying the same rate of conversion to the remaining Preferred shares would require the Company to issue another 380 Million +/- shares to Discovery.
• The Company has a total of 500 million authorized shares. At some point there will not be any more shares they can issue.
• The above may very well justify the need for a R/S, if only just to make more shares available for issuance.
• For both conversion and redemption, the Company has the option to pay Discovery with cash that they have on hand. Obviously if the Company goes this route they will deplete their remaining cash before the end of the year.
• For added drama, because the Company has already breached the terms of the agreement, Discovery has the unilateral right to be repaid in cash for any redemption of the shares by the Company.
They say that necessity is the mother of invention. This is just an opinion, but I think if anything this is a reality check for the Company as well. It will force their hand to act. The status quo is not going to work. Don't be surprised if we are approached again. This time with a proposal that is more definitive and one that we can live with and support.
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