CFON's convertibles aren't truly floorless. They seem to be limited to a downside conversion of about $4.21/share. From the 12/31/97 8-K:
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DECEMBER 1997 PRIVATE PLACEMENT
On December 19, 1997, C-Phone Corporation (the "Company") completed a private placement (the "December Placement") pursuant to which the Company issued to several investors an aggregate of (a) 4,500 shares (the "Preferred Shares") of the Company's newly created Series A Convertible Preferred Stock, par value $.01 per share (the "Series A Preferred Stock") with an initial stated value of $1,000 per share (which increases at the rate of 5% per annum) (such amount, as increased from time to time, the "Stated Value"), (b) warrants (the "One-Year Warrants") to acquire up to an aggregate of 315,000 shares of common stock, par value $.01 per share, of the Company ("Common Stock"), and (c) warrants (the "Three-Year Warrants" and with the One-Year Warrants, collectively, the "Warrants") to acquire up to an aggregate of 135,000 shares of Common Stock, for an aggregate purchase price of $4,500,000, before payment of fees and expenses.
Each Preferred Share is convertible, from time to time in whole or in
part at the option of the holder, into such number of shares of Common Stock as is determined by dividing the Stated Value by the lesser of (a) $7.3575, and (b) 85% of the average of the closing bid price during such three consecutive trading day period as may be selected by the holder during the 25 trading day period preceding the date of conversion. The Preferred Shares cease to be convertible (the "19.99% Limitation") if, at any time the aggregate number of shares of Common Stock then issued upon conversion of the Preferred Shares would equal 1,068,500 shares of Common Stock (the remaining shares of Common Stock then issuable upon conversion of the Preferred Shares being the "Excess Shares"), unless, in accordance with the rules of The Nasdaq Stock Market, Inc. ("Nasdaq") (on which the Common Stock is traded), the Company has obtained approval for the issuance of the Excess Shares by a majority of the total votes cast on such proposal by the holders of the then outstanding Common Stock (not including any shares of Common Stock held by present or former holders of the
Preferred Shares that were issued upon conversion of the Preferred Shares), or it has otherwise obtained permission from Nasdaq to allow such issuances. Any outstanding Preferred Shares on December 19, 1999 automatically will be converted into Common Stock at the conversion price then in effect.
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$4,500,000/1,068,500 shares = $4.21/share |
