More on Floorless convertibles:
I found the following in their 1996 S-3 filing. They have in the past issued floorless securities, so we need to be careful.
"$8,000,000 of the Debentures have no minimum conversion price." Yikes!
Does anyone know how much of the debentures are still outstanding? When in 1998 are they due?
"Possible Substantial Dilution; Conversion of Debentures. As of March 31, 1996,
the Company has outstanding a total of 16,377,850 shares of Common Stock. This
Prospectus primarily covers the resale of shares of Common Stock issuable upon
conversion of two series of 8% Convertible Subordinated Debentures Due 1998,
aggregating $11,100,000. The initial conversion price of both series of
Debentures is $5. However, both series of Debentures contain a formula (which
formula differs in each series) for the adjustment of the conversion price based
on the current stock price in the period immediately preceding the date of
conversion. Of the Debentures, $3,100,000 cannot convert at a price below $3,
but $8,000,000 of the Debentures have no minimum conversion price. At the time
of the resale of shares under this Prospectus, it is possible that holders of
all of the Debentures will not yet have converted their securities, leaving open
the possibility that the conversion price could substantially adjust downward.
Accordingly, there can be no assurance that the conversion of Debentures will
not result in substantial per share dilution to existing holders of Common
Stock." |
