VASO has some toxic floorless convertible preferred stock outstanding:
(the fat churning without price movements can be an indication of a distribution process)
Also see: techstocks.com
sec.gov
sec.gov
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 1,000,000
shares authorized; 147,000 and 175,000 shares at
August 31, 1999 and May 31, 1999, respectively,
issued and outstanding (liquidation preference of
$2,940,000 and $3,500,000 at August 31, 1999 and
May 31, 1999, respectively) 1,470 1,750
Item 5. Other Events
On April 30, 1998, Vasomedical, Inc. (the "Company") issued 175,000 shares
of newly created 5% Series C Convertible Preferred Stock, $.01 par value, at a
price of $20 per share, for an aggregate of $3,500,000. The shares were sold to
one (1) accredited investor pursuant to Regulation D promulgated under the
Securities Act of 1933. The Series C Convertible Preferred Stock is convertible
into Common Stock of the Company at an effective conversion price of the lower
of (i) $2.08, or (ii) 85% of the average closing bid price on the Nasdaq
SmallCap Market System of the Company's Common Stock for the five (5) trading
days immediately preceding the Date of Conversion, as defined in the Certificate
of Designation of the Series C Convertible Preferred Stock attached hereto as
Exhibit 3.1. In addition, the Investor was issued five-year warrants to purchase
413,712 shares of Common Stock at an exercise price of $2.08 per share.
"....Conversion"
(c) (i) The conversion price for each share of Preferred Stock (the
"Conversion Price") in effect on any Conversion Date shall be the lesser of (a)
$2.08 (the "Initial Conversion Price") or (b) 85% of the average of the Per
Share Market Value for the five (5) Trading Days immediately preceding the
Conversion Date; provided that, (a) if the Underlying Shares Registration
Statement is not filed on or prior to the 92nd day after the Original Issue
Date, or (b) the Company fails to file with the Commission a request for
acceleration in accordance with Rule 12d1-2 promulgated under the Exchange Act
within five (5) days of the date that the Company is notified (orally or in
<PAGE>
writing, whichever is earlier) by the Commission that an Underlying Shares
Registration Statement will not be "reviewed" or is not subject to further
review or comment by the Commission, or (c) if the Underlying Shares
Registration Statement is not declared effective by the Commission on or prior
to the 105th day after the Original Issue Date, or (d) if such Underlying Shares
Registration Statement is filed with and declared effective by the Commission
but thereafter ceases to be effective as to all Registrable Securities (as such
term is defined in the Registration Rights Agreement) at any time prior to the
expiration of the "Effectiveness Period" (as such term as defined in the
Registration Rights Agreement), without being succeeded within 10 Business Days
by a subsequent Underlying Shares Registration Statement filed with and declared
effective by the Commission, or (e) if trading in the Common Stock shall be
suspended for any reason for more than three Trading Days, or (f) if the
conversion rights of the holders of Preferred Stock hereunder are suspended for
any reason, or (g) after an Underlying Shares Registration Statement has been
declared effective by the Commission, if holders of Preferred Stock are unable
to utilize an Underlying Shares Registration Statement for the resale of
Registrable Securities for an aggregate of ten (10) Trading Days in any 360 days
after the Original Issue Date (any such failure being referred to as an "Event,"
and for purposes of clauses (a), (c) and (f) the date on which such Event
occurs, or for purposes of clause (g) the Business Day after such Event occurs,
or for purposes of clause (b) the date on which such five
(5) days period is exceeded, or for purposes of clause (d) the date on which
such 10 Business Day-period is exceeded, or for purposes of clause (e) the date
on which such three Trading Day period is exceeded, being referred to as "Event
Date"), the Conversion Price shall be decreased by 2.5% each month (i.e., 82.5%
as of the Event Date and 80% as of the one month anniversary of the Event Date)
until the earlier to occur of the second month anniversary after the Event Date
and such time as the applicable Event is cured. Commencing the second month
anniversary after the Event Date, the Company shall pay to the holders of the
Preferred Stock 2.5% of the outstanding amount of Preferred Stock (each holder
being entitled to receive such portion of such amount as equals its pro rata
portion of the Preferred Stock then outstanding) in cash as liquidated damages,
and not as a penalty on the first day of each monthly anniversary of the Event
Date until such time as the applicable Event, is cured. Any decrease in the
Conversion Price pursuant to this Section shall continue notwithstanding the
fact that the Event causing such decrease has been subsequently cured. The
provisions of this Section are not exclusive and shall in no way limit the
Company's obligations under the Registration Rights Agreement. Notwithstanding
anything to the contrary set forth herein, the Company may not, without the
prior written consent of the holders, pay liquidated damages hereunder in cash
unless it shall have received the prior written consent of all lenders of the
Company or its Affiliates that have the right to require such consent or to
subordinate any such cash payment, which consent shall provide that the payment
by the Company of any such liquidated damages hereunder (and the retention of
such sum by the receiving holder) is not subject to any applicable subordination
rights of such lender.
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