The ABC's of Debt to Equity Conversion

Hello all, I just got back from Florida late last night looking at some deals and while I was gone, I have received hundreds of questions about conversions of debt to equity. I want to help everyone understand but, clearly you should always check a company's filings. However, I might not be able to comment on the particulars in a specific situation...I can tell you how it usually works:

Typically, when a debt is converted it is done at a discount to the lowest price in the past 20 days to protect against risk. Typically it is debt converted into free trading shares which can be sold immediately. SO, every has a job to do in not letting the stock price dip too much. The lower it goes, the better the deal the debtor gets. For example if the stock dips to .0002 then the debtor can get their stock based on that price for the next 20 days even if it climbs to $1. The higher the stock price stays, the less of a discount the debtor gets and the less dilution takes place. So it’s a bit of a catch 22. It can be very positive if shareholders of a company like this buy stock, and tell friends to buy, keeping the stock price up and absorbing the selling. Especially if you know there is a limited amount of debt and that it will stop eventually because at that point the stock price will typically shoot straight up 1000% or more as long as the company has a solid business model.

I hope that helps. Now, at least you have an idea of the basic fundementals.
Have a great weekend!

Thank you,
Raymond Barton

Why Business Brokerage?

A lot of people ask me why I chose to start a business brokerage. The reason is that this industry has all the right ingredients for a major success. Some of those are:
Timing: The time has never been better for business brokerage. Many people are looking to sell their businesses to retire and many younger business people are looking to supplement lost employment by opening their own business.

Lack of competition: There are only around one percent as many business brokers as there are real estate agents. Since most businesses do not own the building they are in this opens a world of opportunity for a good business brokers.

Proven model: Business brokerage has been around for decades. the model works, and business brokers are among the most successful intermediary consultants in the world. it's only the onslaught of the current economy that has really brought to light the necessity of a business broker to the consumer.
No clear leader: The business broker industry is very fractionalized. there are many small shops, a handful of midsized shops and then their is Northstar. The top spot is up for grabs, and I am determined to grab it.

All in all I'm sure you'll agree. Proper execution of this business could create a monster of an industry leader, and drawing off of my years of experience running a similar firm, I feel I know exactly how to do that. We are offering our brokers an 80% payout (the highest in the industry), an online training program removing the barrier of entry, and all the tools necessary to become extremely successful in this business. Remember, for infomration about starting your own Northstar branch office, or becoming a broker with us, go to www.northstarbb.com.

--Ray Barton