Re: conversion price etc.:
I read in the SEC papers under the Heading: Conversion Amount/Conversion Price:
"
For purpose of this Certificate of Designations, the following terms have the following meanings:
(i)"Conversion Price" means, as of any Conversion Date (as defined below) or other date of determination, the lower of the Fixed Conversion Price (as defined below) and the Floating Conversion Price (as defined below),each in effect as of such date and subject to adjustment as provided herein.
(ii)"Fixed Conversion Price"means (A) with respect to any Preferred Shares issued at the Initial Issuance Date(I) on any Conversion Date prior to the Fixed Conversion Price Trigger Date,$5.00 and(II) on any Conversion Date on and after the FIXED Conversion Price Trigger Date,120% of the Market Price of the Common Stock on the Fixed Conversion Price Trigger Date and (B) with respect to any Preferred Shares issued after the Initial issuance Date, 120% of the Market Price on the Issuance Date of the applicable Preferred Shares, each subject to adjustment as provided herein.
(iii)"Floating Conversion Price"means, as of any date of determination, the amount obtained by multiplyng the Conversion Percentage in Effect as of such date by the Market Price as of such date, subject to adjustment as provided herein.
(iv)"conversion Pecentage" means (A) with respect to any Conversion Date prior to Febrary 15,1999, 100% and (B) with respect to any Conversion Date on or after February 15,1999 ""(I)IF THE COMPANY CONSUMATES ONE OR MORE CORPORATE COLLABORATIONS OR STRATEGIC PARTNERSHIPS DURING THE PERIOD BEGINNING ON OCTOBER 18.1998 AND ENDING ON AND INCLUDING FEBRUARY 14,1999 WHICH PROVIDES THE COMPANY DURING SUCH PERIOD WITH AN AGGREGATE OF MORE THAN $7,000,000.- OF REVENUE AND /OR NET PROCEEDS FROM EQUITY INVESTMENTS OR THE ISSUANCE OF QUALIFIED SUBORDINATED DEBT (AS DEFINED BELOW)(INCLUDING,WITHOUT LIMITATION, AMOUNTS RECEIVED BY THE COMPANY FROM HOECHST MARION ROUSSEL("HMR')PURSUANT TO ANY AGREEMENT ENTERED INTO PRIOR TO THE IINITIAL ISSUANCE DATE AND ANY AMENDMENTS THERETO)(COLLECTIVELY,A "QUALIFYING FINANCING"),"" 100% (II) if the Company fails to consumate a Qualifying Financing during the period beginning on the Initial Issuance Date and ending on and including February 14,1999, 90%, each subject to adjustment as provided herein.
(v) "Market Price" means, with respect to any security for any date of determination , the price which shall be computed as the arrithmetic average of the four lowest Closing Bid Prices for such security during the 22 consecutive trading dates immediately preceding such date.
And to end:
(xii)"FIXED CONVERSION PRICE TRIGGER DATE" means the earlier of (A) February 15,1999 and (B) the date of receipt by each holder of Preferred Shares of written notice from the Company of the Company's election to reset the Fixed Conversion Price prior to Feb,15,1999
"".."" fat printed by me.
In view of the equity financing , and additonals, by HMR is in my view a conversion percentage of 90% out of the picture!!!
But do your own reading, I am not a lawyer, but I have the impression that the amount of possible dilution is exagerated.
Best regards,
Martin
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