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Strategies & Market Trends : Floorless Preferred Stock/Debenture -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (441)	6/6/1999 10:06:00 AM
From: TH	Read Replies (1) \| Respond to of 1438

InfoStream, Thanks again for your, and everyones help. I have to do a little math on those number of shares, but I believe these numbers represent either the maximum number of shares that are reserved in advance of conversion, or may represent a combination of the preferred stock and the addition of stock purchased by warrant. BTW, this bit from the 8K may change things. It appears that the company has put in a clause that allows them to force conversion if the price falls below the redemption threshold of $1.50 (which is also the current price). This would make sense as Dr Armstrong stated that the company would not do any more floorless offering. He has not lied yet, and I was quite surprised to see this new stock offered as his statement was made less than 90 days ago. From section VI. D from the latest 8K. D. Notwithstanding anything to the contrary contained in this Article VI and subject to the terms of this Article VI.D, if the Closing Price of the Common Stock is below the Redemption Threshold on any day a Notice of Conversion (as defined in Article VIII) is given, the Corporation shall have the option, in lieu of issuing shares of Common Stock to the holders of 1999 Series III Preferred Stock upon conversion in accordance with the terms of Article VIII below, to redeem all of the shares of 1999 Series III Preferred Stock submitted for conversion for an amount in cash equal to the number of shares of Common Stock that would have otherwise been issued upon conversion of the 1999 Series III Preferred Stock at the applicable Conversion Price (as defined in Article VIII) multiplied by the Redemption Market Price. If the Closing Price of the Common Stock is below the Redemption Threshold, the Corporation shall promptly notify the holders of 1999 Series III Preferred Stock as to whether the Corporation will issue shares of Common Stock or deliver cash in redemption in respect of 1999 Series III Preferred Stock submitted for conversion pursuant to Article VIII. The Corporation will be bound by such notice for a period of twenty (20) Trading Days (the "Term") from the date of such notice, after which the Corporation may elect to renew such notice. A failure to issue or renew within two (2) business days after the expiration of any Term shall be deemed to be an election to issue Common Stock upon conversion of the 1999 Series III Preferred Stock during the subsequent Term. Any redemption amounts payable hereunder shall be paid to the converting holders within two (2) Trading Days of the Conversion Date. The redemption threshold is $1.50 The way I read this is that the company will not deliver shares in an amount greater than the normal terms for pricing based on a maximum low of 1.50. This would put a little monkey wrench in the holders plans if they wanted to short to zero, or cover anywhere under 1.50. Good Luck Thurston