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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (24190)	3/15/2001 4:50:30 AM
From: Ditchdigger	Respond to of 29382

Good morning Sergio, and all. Glad you brought up the subject of RAD's settlement..I would love to have a thread discussion regarding this settlement as well as a few others I'm finding hidden in the 10Q as I go along..the first which you mentioned..I'm interested in thoughts regarding the relationship of what posters consider "the trading range" of the stock and these stock conversion clauses..TIA (thinking about riding this one out for awhile,in hopes of a true turn around, but still researching whether they can really do it or not<g>) Seems here, the company wants the stock to be above $7.75 in order to repay with 20mm shares(plus $45mm cash),if it's much higher-doesn't matter, they still have to issue 20mm sh..But the class actioners<g> would like it lower(if they want the possibility of more shares on settlement) "If the company is not in a position to utilize cash or notes in order to satisfy this obligation, it could be required to deliver a substantially larger amount of its common stock"..selltement is still capped at $155mm..So I'm confused as to where the hedge benefits lie..Someone please explain!<g> ........ "We also agreed to issue common stock to settle our securities class action lawsuit. Under the terms of the settlement, which is subject to the approval of the courts, the company's insurers will pay $45 million in cash and the company will issue shares of its common stock in 2002. The shares will be valued over a ten day period in January, 2002. If the price determined is at least $7.75 per share, the company will issue 20 million shares of its common stock. If the value determined is less than $7.75 per share, the company has the option to deliver any combination of common stock, cash and short term notes with a total value of $155 million. If the company is not in a position to utilize cash or notes in order to satisfy this obligation, it could be required to deliver a substantially larger amount of its common stock. In light of the company's substantial leverage and liquidity constraints, management will continue to consider opportunities to use the company's equity securities to discharge debt or other obligations that may arise. Such issuances may have a dilutive effect on the outstanding shares of common stock." .......... Next one<g>, Have all the series B been converted here, or just some, and some remains with a $5.50 conversion price? "On October 27, 1999, the Company issued 3,000,000 shares of Series A cumulative pay-in-kind preferred stock ("Series A Preferred Stock") at $100 per share. It subsequently exchanged all 3,000,000 shares of Series A Preferred Stock for 3,000,000 shares of Series B cumulative pay-in-kind preferred stock ("Series B Preferred Stock"). The Series B Preferred Stock, when issued, was convertible into shares of the Company's common stock at a conversion price of $11.00 per share of common stock. The conversion price of the Series B Preferred Stock was subject to adjustment if the Company issued common stock before October 27, 2000 at a per share price that was less than the then current conversion price of the Series B Preferred Stock and in certain other circumstances. In connection with the refinancing effected on June 14, 2000, the Company issued common stock at a per share price of $5.50. As a result of this issuance, the per share conversion price for the Series B Preferred Stock was adjusted to $5.50. " ................... Oops, someone is at the door, another early bird<lol>..talk later..DD continued later..some of the stuff out there(how does the number $5.50/sh..fit into the "trading range"? We have $7.75 and $5.50 to work with<g> ................. "Exchange of Debt for Equity. In June 2000 a total of $284.8 million of indebtedness under the RCF and PCS credit facilities and the demand note was exchanged for common stock at a price of $5.50 per share. As a result of this exchange, we recorded a gain of $11.4 million in second quarter of fiscal 2001. On June 26, 2000, we issued 17.8 million shares of our common stock in exchange for $177.8 million in principal amount of our 5.25% convertible subordinated notes due 2002. As a result of this exchange, we recorded a loss on extinguishment of $89.0 million in the second quarter of fiscal 2001. On November 10, 2000, we issued 9.2 million shares of our common stock in exchange for $79.9 million of our 5.25% convertible subordinated notes due September 1, 2002 and $12.4 million of our dealer remarkable securities due October 1, 2003. As a result of these exchanges, we recorded a net loss on extinguishment of $8.3 million in the third quarter of fiscal 2001."