RE:RE:TIME IS RIGHT That is exactly what I guessed as soon as I read the rights offering in the Q3 report.
Why else would they do that right now with the share price below $.30, even if they do a 1 for 1 at $.30 its only $6.5 million. That won't make a dent in the debt.
I think management is planning that the rights owned by the public shareholders (currently about 56% of the outstanding) won't be exercised and they can scoop them up at a discounted price. That way insiders will likely own about 60% of the outstanding shares after the offering and be able to price a "fair" premium of say 20% on the 10 day average of the share price in a few months and we will have no say to stop it.
It just happened in another company I had invested in, 3 rights offerings (on a continued discounted amount) that were under subscribed each time where the major shareholder bought them all up. Then put out a buyout annoucement that was only slightly higher than the last rights offering as they thought it was "fair"