Mezz, the "Nidan" convertible debentures you found in the 10k/a for the period ending 12/31/97 are interesting. They were floorless convertibles with a 50% discount.
As you mentioned, SCMI was refusing to issue common shares to convert them, as of Dec. 97:
The Company believes that the conversion
of these debentures may constitute a violation of Michigan securities law as a
result of the Company being subject to a consent order; accordingly, the
Company refused to convert these debentures at maturity pending a
determination of the conversion rights available to residents of the State of
Michigan.
The 10k for 12/31/98 tells us the rest of the story:
Subsequently, the
note holders and the Company determined that the offer to Michigan residents
of the underlying common stock was made by the conversion feature of the
debentures and that the issuance of common stock in conversion would not in-
of-itself constitute an additional violation under the consent order.
In 1998, the Company issued 5,242,929 shares of its common stock upon
conversion of the $845,000 in principal amount of Nidan Debentures transferred
to residents of the State of Michigan, according to the original conversion
feature contained in the respective debenture note. The Company also issued,
effective as of June 30,1998, 2,500,000 shares of its common stock and
2,000,000 common stock purchase warrants upon conversion of all remaining
Nidan Debentures pursuant to a settlement agreement. |
