VALUESPEC,
I don't think so. The S/I maintains that the automatic conversion that takes place 18 months after the purchase price is still subject to the minimum conversion at $1.
Automatic Conversion. Each share of Series C Preferred Stock outstanding on the date which is eighteen (18) months after the Record Date or, if not a business day, the first business day thereafter ("Termination Date") automatically shall be converted ("Automatic Conversion") into Common Stock on such date at the Conversion Rate then in effect (calculated in accordance with
the formula in Section 5(a) above).
"Section 5(a) above" gives the formula for conversion and then defines conversion price:
Conversion Price = the lesser of (x) a "Fixed Conversion Price" equal to the lesser of $5.00 or the average Closing Bid Price, as that term is defined below, of the Company's Common Stock for the thirty (30) trading days immediately following the Record Date, as defined below, provided that in no event shall the Fixed Conversion Price be less than $4.00, or (y) a "Variable Conversion Price" equal to X% of the average Closing Bid Price, as that term is defined below, of the Company's Common Stock for the twenty (20) trading days immediately preceding the Date of Conversion, as defined below, where X is determined as follows: No. Months Between Record Date and Date of Conversion "X" If 4 months-6 months then 85%, after 6 months 80% provided, that in no event shall the Variable Conversion Price be less than $1.00.
One thing that may affect stock price is Frank is to receive some shares in January 1999. Here is the exerpt from the Dec 9 S/I:
During the year ended June 30, 1995, the Company issued notes for an aggregate of $217,000 payable to its President, Frank W. Peters, in lieu of compensation, included in the table above. These notes bear interest at the rate of 9% per annum and are due and payable as follows: $12,000 due on August 20, 1995, $65,000 due on August 20, 1997, and $140,000 due on January 5, 1999. Mr. Peters has waived any defaults or penalties with respect to the unpaid portions of these notes. The $140,000 note is convertible into shares of the Company's Common Stock at a conversion price of $.10 per share.
Of course, these were pre-split shares back in late 1994 or early 1995 so maybe he'll only be converting 140k shares.
WH |
