What is going on here?
The Company filed a withdrawal of its S-3A Post Effective Registration Statement. I assume in conjuction with the announcement yesterday regarding the Preferred B's:
sec.gov
The cancelled Registration Statement is:
sec.gov
Text taken from that document related to the Preferred B's:
Potential for Dilution from Conversion of Series B Preferred Stock
Series B Preferred Stock. As of December 7, 1998, 2,250 shares of our
Series B Convertible Preferred Stock were issued and outstanding. The shares of
Series B Preferred Stock are convertible at the option of the holders into that
number of shares of Common Stock as is generally determined by the following
formula:
o Multiply the stated value ($1,000) by the number of outstanding shares
of Series B Preferred Stock (under certain circumstances, this value
may be increased by a premium based on the number of days the Series B
Preferred Stock is held), and divide the product by the then current
Conversion Price (set forth below).
o The Conversion Price is based on the average of the lowest six trading
prices of our Common Stock in the twenty trading days ending one day
prior to the date of conversion of the Series B Preferred Stock. Thus,
if the Series B Preferred Stock was converted on December 7, 1998, the
Conversion Price would have been $2.06.
Based on this formula, if the remaining outstanding Series B Preferred
Stock was converted on December 7, 1998, it would have been convertible into
approximately 1,092,233 shares of Common Stock. This number can prove to be
significantly greater in the event of a decrease in the trading price of our
Common Stock. Purchasers of our Common Stock will experience substantial
dilution of their investment upon conversion of the Series B Preferred Stock.
However, in the event the price of our Common Stock falls below $3.26, subject
to applicable laws restricting our repurchase of stock, we have the option to
elect to pay cash (at a premium to the then current market price of our Common
Stock) to the holders of Series B Preferred Stock in lieu of converting the
shares of Series B Preferred Stock. In the event we elect to pay cash,
purchasers of our Common Stock will suffer less dilution. Our election to pay
cash, however, will come at the expense of diverting our available cash funds
from other potential uses. The shares of Series B Preferred Stock are not
registered and may be sold only if registered under the Securities Act or sold
in accordance with an applicable exemption from registration, such as Rule 144.
As of December 7, 1998, warrants to purchase 50,000 shares of Common
Stock issued to the purchasers of the Series B Preferred Stock and exercisable
for a period of three years following May 1, 1998 at a price of $5.16 (as may be
adjusted from time to time under certain antidilution provisions) were
outstanding.
As of December 7, 1998, 5,854,398 shares of Common Stock were reserved
for issuance upon exercise of our outstanding warrants and options (excluding
the warrants issued to the purchasers of the Series B Preferred Stock) and an
additional 4,300,000 shares of Common Stock were reserved for issuance upon
conversion of the preferred stock and exercise of the warrants issued to the
purchasers of the Series B Preferred Stock. At October 31, 1998, there were
13,514,735 shares of Common Stock outstanding. Of these outstanding shares,
13,492,952 were freely tradable without restriction under the Securities Act
unless held by affiliates who are subject to certain limitations under Rule 144
of the Securities Act of 1933, as amended.
So what does this tell us? And what were the terms of the Preferred C's?
(-8 Dennis 8-)
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