Cube, here is a quote from INPR S3/A of last June:
On June 30, 1997, the Company completed the initial closing (the "Initial
Closing") of an equity financing pursuant to a series of subscription agreements
(the "Financing Agreements"). The Financing Agreements contemplate several
closings in connection with the sale of Series B Shares and Warrants which are
subject to various conditions. At the Initial Closing, the Company raised
proceeds of approximately $25 million through the sale of 495 Series B Shares
and Warrants to purchase up to 198,000 shares of the Company's Common Stock.
Subject to various conditions, including the effectiveness of this Registration
Statement, the Financing Agreements provide for the issuance of an additional 55
Series B Shares and Warrants to purchase 22,000 shares of the Company's Stock
which is to be made at a second closing and on the same terms applicable at the
Initial Closing (the "Second Closing"). The Financing Agreements also provide
that at any time from June 30, 1998 through June 30, 2000, each purchaser at the
First Closing and Second Closing (each a "Selling Stockholder") has the right
(the "Selling Stockholder Call Option") to require the Company to issue for
every five (5) unconverted Series B Shares held by such Selling Stockholder at
June 30, 1998 (or such earlier date as there has been a mandatory conversion as
described below), up to two (2) Series B Shares along with a pro-rata share of
Warrants. Such right may be exercised only at such time(s) that the closing
market price of the Company's Common Stock is greater than $8.00 per share and
is otherwise subject to the same terms and conditions as apply to the Second
Closing.
TERMS OF THE SERIES B PREFERRED STOCK
The Series B Shares are convertible into shares of Common Stock, at the
election of the holder of such Series B Shares, at a price (the "Conversion
Rate") equal to the lower of the market price at the original date of issuance
of such share (the "Initial Price") or the market price when a holder of Series
B Shares delivers notice of his election to convert such shares ("Notification
Date"). "Market price" is generally determined by the closing price for the
Company's Common Stock on the applicable date.
Subject to conditions specified below, the Selling Stockholders may
convert, in aggregate, up to a maximum of a specified percentage of the Series B
Shares according to the following schedule:
Days from Closing % of Series B Shares Convertible
1 through 45 0
46 through 90 20
91 through 135 40
136 through 180 60
181 through 225 80
greater than 225 100
The floorless condition is "mitigated" a little since if not converted, the holder can get a little more of the same stuff. The issue has a ceiling just under 7, and no "look back" features. This one certainly qualify as a "floorless" and if you look at the list of subscribers it includes a number of hedging outfits.
Stay away until the conversion is over (by now the whole issue is convertible).
Zeev
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