From the latest 10Q filed Nov. 14, 2001, a critical revision to the terms of the Series B Redeemable Preferred Stock:
"Factors Affecting Future Liquidity (p.14)
On June 1, 2000, the Company received $10,000,000 in gross proceeds from the issuance of Series B Redeemable Preferred Stock ("Preferred Stock") to a group of investors led by ACI Capital Co., Inc. ("ACI investors"). In connection with the issuance of the Preferred Stock, warrants ("Warrants") to purchase one million shares of the common stock of the Company were issued to the ACI investors. The Preferred Stock is subject to mandatory redemption on May 31, 2005 and cash dividends are payable semi-annually at a rate of 6%, subject to rate increases in the event of a triggering event as defined in the Preferred Stock. To avoid the possibility of there being a current or a future triggering event under a certain financial covenant provision of the Preferred Stock that would allow the ACI investors to call for immediate redemption of the Preferred Stock, the Company and the ACI investors entered into an agreement on November 13, 2001 that provided, among other things, that: (i) the redemption price for the Preferred Stock would not in any event be due prior to December 1, 2002,
(ii) any increase in the dividend rate to which the ACI investors might otherwise be entitled to would not go into effect prior to March 31, 2002 and
(iii) Section 14.1 of the Warrants that now provides that the Company would be obligated to purchase the Warrants upon a change of control pursuant to the formula therein set forth would be amended effective March 31, 2002 to provide that the Company would be obligated to purchase the Warrants pursuant to such formula if, as and when the Preferred Stock is redeemed."
These new terms might be appealing to a potential buyer of SEMX. |
