Yes, Pasaca will get 51% of the fully diluted shar
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Posted On: 07/18/2021 9:48:28 AM
Yes, Pasaca will get 51% of the fully diluted shares, not 51% of the 700M outstanding shares. Fully diluted includes options, warrants, convertible shares and issuable shares.
Another point is that the $10.5 million has been reduced to $7.75 million since QMC borrowed more from Pasaca in March/April, which increased the convertible note to $7.25 million (249 million shares).
Here is an update of my previous post based on additional info from the 10-K.
Determine minimum number of Authorized Shares needed to give Pasaca 51% of fully diluted shares after Second Closing.
689,153,592 Outstanding shares as of 1/26/21 (from Pasaca Agreement)
+121,600,000 outstanding options
+ 64,049,738 outstanding warrants
+124,246,699 convertible debt
+ 8,980,202 payment of services or purchase of digital assets
=1,008,030,231 fully dilute shares as of 1/26/21 (“current”)
Originally it was not clear to me if the 124M convertible debt number represented Pasaca’s Notes or other Note Holders, so I conservatively left out the 124M when calculating the fully diluted shares and arrived at 883,783,532. Based on the latest 10-K, I think it is reasonable to believe that the 124M convertible debt number represents Notes held by others, like QMVT and Hoppel, and should be included in the fully diluted share count.
The “current” total diluted shares will make up 49% of the “new” fully diluted shares after the Pasaca completes their buy-in. Therefore, divide the “current” fully diluted shares by 0.49 to determine the “new” fully diluted shares.
1,008,030,231 / 0.49 = 2,057,204,553
Then determine the total number of shares that Pasaca will need to give them 51% of the new fully diluted shares by multiplying by 0.51.
2,057,204,553 x 0.51 = 1,049,174,322 Pasaca’s total shares
According to the 1/26/21 Pasaca Agreement, the $4.5M Senior Note would be converted into 154,228,625 shares. However, the 10-K indicates that as of 3/15/21, Pasaca beneficially owns 249,661,287 shares of common stock issuable upon conversion of their debentures. This is because QMC borrowed the additional $2.75 million.
To determine the number of shares that Pasaca needs to purchase at the Second Closing to give them 51%, start by subtracting the Senior Note conversion shares from Pasaca’s total shares.
1,049,174,322
-249,661,287
799,513,035
Therefore Pasaca will convert the $7.25 million in notes into 249,661,287 shares ($0.029 per share) and will pay $7.75 million for the additional 799,513,035 shares ($0.0097 per share) at the second closing to give them 51% of the new fully diluted shares (combined avg of $0.0143 per share).
So Authorized Shares needs to be above 2.0 billion and I would expect that QMC will ask for 2.5 billion Authorized Shares in the proxy.
Another point is that the $10.5 million has been reduced to $7.75 million since QMC borrowed more from Pasaca in March/April, which increased the convertible note to $7.25 million (249 million shares).
Here is an update of my previous post based on additional info from the 10-K.
Determine minimum number of Authorized Shares needed to give Pasaca 51% of fully diluted shares after Second Closing.
689,153,592 Outstanding shares as of 1/26/21 (from Pasaca Agreement)
+121,600,000 outstanding options
+ 64,049,738 outstanding warrants
+124,246,699 convertible debt
+ 8,980,202 payment of services or purchase of digital assets
=1,008,030,231 fully dilute shares as of 1/26/21 (“current”)
Originally it was not clear to me if the 124M convertible debt number represented Pasaca’s Notes or other Note Holders, so I conservatively left out the 124M when calculating the fully diluted shares and arrived at 883,783,532. Based on the latest 10-K, I think it is reasonable to believe that the 124M convertible debt number represents Notes held by others, like QMVT and Hoppel, and should be included in the fully diluted share count.
The “current” total diluted shares will make up 49% of the “new” fully diluted shares after the Pasaca completes their buy-in. Therefore, divide the “current” fully diluted shares by 0.49 to determine the “new” fully diluted shares.
1,008,030,231 / 0.49 = 2,057,204,553
Then determine the total number of shares that Pasaca will need to give them 51% of the new fully diluted shares by multiplying by 0.51.
2,057,204,553 x 0.51 = 1,049,174,322 Pasaca’s total shares
According to the 1/26/21 Pasaca Agreement, the $4.5M Senior Note would be converted into 154,228,625 shares. However, the 10-K indicates that as of 3/15/21, Pasaca beneficially owns 249,661,287 shares of common stock issuable upon conversion of their debentures. This is because QMC borrowed the additional $2.75 million.
To determine the number of shares that Pasaca needs to purchase at the Second Closing to give them 51%, start by subtracting the Senior Note conversion shares from Pasaca’s total shares.
1,049,174,322
-249,661,287
799,513,035
Therefore Pasaca will convert the $7.25 million in notes into 249,661,287 shares ($0.029 per share) and will pay $7.75 million for the additional 799,513,035 shares ($0.0097 per share) at the second closing to give them 51% of the new fully diluted shares (combined avg of $0.0143 per share).
So Authorized Shares needs to be above 2.0 billion and I would expect that QMC will ask for 2.5 billion Authorized Shares in the proxy.
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