Did you know that DigitalAMN’s common stock is limited against toxic dilution, because there is a fixed floor price of $0.35, established for all common stock issuances (new issuances, conversions, compensation, etc.)?
In short, DigitalAMN does not issue any of DATI’s common stock priced below the $0.35 floor in the normal course of business.
Convertible Notes: No DigitalAMN convertible note has a conversion price of less than $0.35. Even if there is a floating conversion rate, the conversion rate will not be less than $0.35.
Preferred Share Conversions: When Preferred Stock is converted into shares of DATI’s common stock, no issuances will ever be less than a price of $0.35. Even if there is a floating rate on the preferred share conversion, the conversion rate will not be less than $0.35.
Stock Purchase Agreements: When DigitalAMN raises money by selling Restricted Stock to accredited investors, no shares of DATI’s common stock can be sold at a sales price of less than $0.35. Even if the shares are sold to an accredited investor at a discount to market, the discount rate will not be less than $0.35.
Compensation: When DigitalAMN pays its executives and/or consultants, vendors or other third parties in stock, no shares of DATI common stock can ever be paid or issued at a price of less than $0.35. Even if the shares are paid to its executives or third parties at a discount to market, the discount rate will not be less than $0.35.
Benefit of an Issuance Floor Price
It is very important for DigitalAMN shareholders to understand the benefit of DATI having a fixed floor price of $0.35 for all common stock issuances. This $0.35 floor price in and of itself helps to protect DATI shareholders from toxic financing and indiscriminate stock issuances – both generally regarded as a cause of heavy dilution; ultimately leading to the demise of many microcap companies trading on the OTC markets.
This is fortunately not the position DigitalAMN’s management views DATI.
As discussed in a May 2020 shareholder update, the Company raised roughly $1.1M at a $0.35 floor price, with a larger portion of the money raised being approximately 480% greater than the ‘then’ current average share price.
Further, as discussed in a May 28th 2020 Coffee Talk, since 2017, the trading float of DATI had only increased by 2,247,802 shares, from 2,256,736 to 4,504,538 shares, partly due to DigitalAMN’s floor price of $0.35.
Clarity: DATI’s common stock can be issued at prices greater than $0.35, which is the overall goal. We believe this could occur when what appears to be the perceived value of DigitalAMN and the DATI share price, become intrinsically aligned.