Preferred shares with extraordinary voting rights.
Series D Preferred Stock
On August 30, 2013, Pervasip issued 51 shares of Series D Preferred Stock to the Company’s Chief Executive Officer and another individual who was an officer at that time. The Series D shares have dividend rights equal to common stock on a share-for-share basis, but no liquidation rights. Each share of the Series D Preferred has voting rights equal to (x) 0.019607 multiplied by the total issued and outstanding shares of Common Stock eligible to vote at the time of the respective vote (the “Numerator”), divided by (y) 0.49, minus (z) the Numerator - i.e. the ratio of the voting power of the aggregate Series D shares to the aggregate Common Stock is 51 to 49. The Company is required to redeem all shares of Series D Preferred, in cash, for $1.00 per share on the earlier to occur of (1) the first anniversary of the date upon which all obligations of the Company to 112359 Factor Fund, LLC (and/or its assign(s)) have been satisfied in full, or (2) December 31, 2019.
Series E, F and G Preferred Stock
On January 13, 2015, 10 shares of Series E Preferred, 10,000,000 shares of Series F Preferred and 10,000,000 shares of Series G preferred were issued to our chief executive officer in exchange for $100,000 in debt. The Series E Preferred has voting rights equal to 400% of the sum of the common stock, Series D Preferred, Series F Preferred and Series G Preferred, but no dividend rights and no liquidation rights. The Series E Preferred is convertible into the number of common shares equal to its voting rights.
Series H Preferred Stock
Shares of Series H Preferred Stock are convertible by the holder into shares of Common Stock. The conversion ratio is such that if all authorized shares of Series H Preferred Stock are converted, the holder would own shares of Common Stock equal to 80% of the fully-diluted Common Shares. Each share of Series H Preferred Stock shall entitle the holder thereof, on all matters submitted to a vote of the stockholders of the Company, to that number of votes as shall be equal to the aggregate number of shares of Common Stock into which such holder's shares of Series H Preferred Stock are convertible on the record date for the stockholder action.
Series I Preferred Stock
Each share of Series I Preferred Stock is convertible by the holder into shares of Common Stock at a conversion ratio equal to $10 divided by the conversion price, except that no conversion may result in the holder becoming the beneficial owner of more than 4.99% of the outstanding common shares. The conversion price is one hundred percent (100%) of the average of the five (5) lowest closing bid prices for the Common Stock during the ten (10) consecutive trading days immediately preceding the conversion date or other date of determination, as quoted by Bloomberg, LP
Each share of Series I Preferred Stock shall entitle the holder thereof, on all matters submitted to a vote of the stockholders of the Company, to that number of votes as shall be equal to the aggregate number of shares of Common Stock into which such holder's shares of Series I Preferred Stock are convertible on the record date for the stockholder action without taking into account potential conversions of any other convertible securities issued by the Company.
Series J Preferred Stock
There are no liquidation rights associated with the Series J Preferred Stock. The Series J Preferred Stock is not convertible into any other class of stock.
Upon the Company’s receipt of notice of a default or an event of default under or pursuant to any document or agreement executed by the Company and TCA Global Credit Master Fund, LP (“TCA”), each share of the Series J Preferred Stock shall have voting rights equal to (x) 0.019607 multiplied by the total issued and outstanding Common Stock and Preferred Stock eligible to vote at the time of the respective vote (the “Numerator”), divided by (y) 0.49, minus (z) the Numerator. Accordingly, the delivery of a notice of default by TCA would give TCA voting control of the Company.
