Andrea issues "floorless" convertible. Since there is no minimum conversion price it is in the interest of the holders of the convertible to have the stock price as low as possible when they convert. The numbers seem to indicate that there is one share per $5 of convertible which is not very good. This resort to a floorless convertible is a further indication of the dire current position of the company in my opinion.
Andrea Electronics Corporation
Completes Private Placement of Convertible Notes
LONG ISLAND CITY, N.Y., July 22 /PRNewswire/ -- Andrea Electronics
Corporation (Amex: AND) announced today that it has issued and sold in a
private placement, $10,753,000 aggregate principal amount of 6% Convertible
Notes ("Notes") due June 10. The Notes will be convertible into shares
of the Company's common stock at a conversion price equal to the average of
the two lowest closing prices of the Common Stock during the 30 trading days
preceding any date of conversion, subject to a maximum conversion price of
$16.125 per share. The Notes become convertible on the earlier of October 8,
1998 and the effectiveness of a registration statement under the Securities
Act of 1933, as amended, covering the sale of the shares of Common Stock
into which the Notes are convertible, which registration statement the Company
is obligated to file. At the option of the Company, interest will be payable
in the form of cash or shares of Common Stock at the conversion price then in
effect. The maximum number of shares issuable upon conversion is 2,100,000
shares. The Company will use the proceeds from the issuance of the Notes for
costs associated with technology acquisition and development, tooling costs,
relocation costs, a new management information system, and working capital
requirements.
Neither the Notes nor the Common Stock issuable upon the conversion of the
Notes have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered or sold in the United States except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the Notes or the Common Stock issuable upon
conversion of the Notes. This press release is being issued pursuant to and
in accordance with Rule 135c under the Securities Act.
Andrea Electronics Corporation designs, develops and manufactures
audio technologies and products for applications incorporating natural
language voice interfaces. The Company's patented Active Noise Cancellation
(ANC) microphone and Active Noise Reduction (ANR) earphone technologies have
been incorporated into the Company's product lines. These product lines
include headsets, handsets and microphones, marketed under the Andrea
VoiceSolutions(TM), QuietWare(TM) and Andrea Anti-Noise(TM) trademarks, that
eliminate background noise and ensure voice clarity to enhance the performance
of speech-driven computer applications. Applications for the Company's
technologies include: speech recognition programs, Internet telephony,
video/audio conferencing and interactive gaming. Key OEM and software
publisher customers and strategic partners of Andrea Electronics include:
Microsoft Corporation, IBM Corporation, Lernout & Hauspie Speech Products,
Dragon Systems, NEC, Mpath, Mulitude, IDT Corporation, HyperGraphics and
ILINC.
This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties or
other factors that could cause actual results, performance or achievements of
the Company to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed under the heading "Cautionary Statement Regarding Forward-
Looking Statements" included in the Management's Discussion and Analysis of
Financial Condition and Results of Operations in the Company's Annual Report
on Form 10-K and in the Company's Annual Report to Stockholders, and in
documents subsequently filed by the Company with the Securities and Exchange
Commission. |
