EToys Enters Agreement With Convertible Preferred Shareholders
Thursday November 16 7:46am
Source: Dow Jones
WASHINGTON -(Dow Jones)- EToys Inc. (ETYS) entered into an amended agreement with holders of its series D convertible preferred stock, according to a Form 8-K filed Thursday with the Securities and Exchange Commission.
According to the Nov. 15 agreement, the preferred shareholders waived their rights to enter into a short sale of eToys stock.
The preferred shareholders also agreed to waive their right to convert the preferred stock into common stock until Jan. 30, 2001, despite eToys' stock price falling below the $3 minimum.
Under the original agreement, the shareholders had the right to convert the preferred stock at any time if eToys' common stock fell below $3 a share for 10 consecutive days.
EToys common shares originally closed below $3 on Nov. 8, dropping 78 cents to $2.56 a share. Since that time, eToys shares haven't closed above $3.
In addition, eToys submitted to the shareholders a conversion election notice for 2,000 shares of the convertible preferred stock. As reported, in June eToys issued 10,000 shares of the convertible preferred stock.
EToys further agreed to provide the preferred shareholders with a conversion option for at least 1,000 preferred shares by Jan. 1 for a conversion to take place after Jan. 31.
Also in the agreement, eToys changed the dates affected by the original agreement with the preferred shareholders to be through Dec. 31, 2000 as opposed to through Jan. 31, 2001.
EToys will file an additional registration statement with the SEC for the preferred shareholders by Nov. 28.
As reported, in June eToys received proceeds of approximately $97.5 million from the private placement of the 10,000 shares of series D preferred stock.
The investors included HFTP Investment LLC, Leonardo L.P., Fisher Capital L.P. and Wingate Capital Ltd.
Thursday, shares of eToys were flat at $2.
EToys is an Internet retailer for children's products.
-Todd Goren, Dow Jones Newswires/Federal Filings Business
(This story was originally published by Dow Jones Newswires)
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