Posted by Richard on March 10, 2000 at 12:46:50:
The following is copied from: http://www.sec.gov/Archives/edgar/data/916460/0000912057-99-009629.txt
I have a couple of questions that will be placed in the text surrounded by [brackets]
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In connection with the financing, the Company paid a cash finder's fee in the
approximate amount of $100,000. In addition, the finders received warrants
exercisable for 498,750 shares of common stock at a price of $0.20 per share.
These warrants are exercisable for a period of one year, commencing November 24,
1999.
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[Does the company philosphy still hold that it will not purchase advertising on penny hypster web pages?]
from a little further down...
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Each share of Series B Preferred is initially convertible into one share of the
Company's Common Stock, subject to adjustment for recapitalizations, stock
splits and similar events. Subject to certain exceptions, the Series B
conversion ratio is subject to adjustment in the event the Company issues shares
of Common Stock for no consideration or for a consideration less than the fair
market value of the Common Stock as of the date of such issuance. The Series B
Preferred automatically converts into common stock in the event the average
trading price of the Company's common stock over 60 consecutive trading days is
greater than $1.00 per share and the cumulative trading volume during such 60
day period is at least 1,000,000 shares, if traded on a national securities
exchange, or 1,500,000 shares if traded on NASDAQ or over-the-counter. The
Series B Preferred also automatically converts into common stock in the event
the Company completes an underwritten public offering in which the Company
receives gross proceeds of
[the use of cumulative in this case means a total of a million shares for the entire 60 day period? It does not mean average per day...correct?] The holders of Series B Preferred may tender their shares for redemption at a [Does this mean that I as a common share holder will not get the value I would have recieved before the company added the preferred stock if it goes under or something else? If something else could you please explain this in laymans terms?(thanks)] [Have they elected a board member yet? If so who?] ----------- [If the company did not hype the stock to pennystock advertisers, is there anyone who would gain benefit from such hype that did?] [Thanks for any info that you can give...]
2
at least $10,000,000 and at a per share price of at least $1.00 per share
(subject to adjustment for stock splits, recapitalizations, etc.).
per share price equal to 150% of the liquidation preference in the event of a
Change of Control (as defined in the Statement). In addition, the Company may,
at its option, redeem the Series B Preferred at a per share price equal to 150%
of the liquidation preference[What does this part mean in laymans terms?] in the event that, from and after November 24,
2000, the common stock trades above $0.75 per share for sixty (60) consecutive
trading days.
Purchasers of Series B Preferred are also parties to an Investor Rights
Agreement (a copy of which is attached as an exhibit to this Report), which
grants certain demand and "piggyback" registration rights. The holders of Series
B Preferred, voting as a separate class, are entitled to elect one member of the
Company's Board of Directors.