Forum Archive Index - August 2000

["Brian Jones" <ibbij@hotmail.com>]

As I see it,a major worry with AQL is that come repayment time for the 
convertible notes there isn't quite enough cash there to pay them.What then? 
The company is wound up and goes out of existence.
In this case as I understand it there isn't even a shell left to do anything 
with.
Or, someone decides to put some money in to provide the extra needed to 
cover the notes and the shell survives. This however may mean very little 
for existing shareholders.
The company still exists but its shares are literally worthless.The Company 
is then recapitalised by the issuing of new shares or placements  but 
because the shares are worthless new shares can be issued at a very low 
value resulting in an instant large shareholder.

Issue new shares at, for example, 1/10 of a cent and $500,000 gets you 500 
million shares.Now have a 1 for 10 consolidation and the origional small 
shareholder becomes a VERY small shareholder.Shares that may have been 
trading by speculators at say 4 cents have now had their value reduced to 
4/10ths of a cent with total shares in the company increased by 50 million.
Magnify this by having several entities  involved (for example the "names" 
currently on the share register)and say 1.5 billion shares, consolidated to 
150 million, and even with AQL used to provide a listing for a prominent 
Company, present shareholders current shares would be worth very little and 
the only way to benefit from AQL being used for a back-door listing would be 
to stump up with more cash and buy "new" shares.

Or,am I being too pessimistic?

Regards.
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