EDIG has reserved 9,157,895 shares of common stock and 3 million warrant shares, which together are called the "Initial Minimum" of underlying shares. The 2,837,778 shares you referred to is just the number of common shares the Series E CP shares represented on the Nov. 19, the date of the signing.
There is no maximum number of shares to which these (nor the Series D shares) can be converted. In fact, the Series E covenants include a provision that if the number of shares required for conversion/warrant exercise exceeds the number of authorized shares (currently 200 million), the BOD is to promptly prepare a proxy requesting an increase in the number of authorized shares.
From the 8K:
As of the date hereof, the Company
has reserved for issuance the sum of 3,000,000 Warrant Shares and
shares of Common Stock for issuance upon conversion of Shares and payment of
dividends thereon in shares of Common Stock (the "INITIAL MINIMUM").
Also this (which is very poorly written):
3.5 INCREASE IN AUTHORIZED SHARES. If on any date the Company would be,
if a notice of conversion or exercise (as the case may be) were to be delivered
on such date, precluded from issuing (a) the number of Underlying Shares as
would then be issuable upon a conversion in full of the Shares, and (b) of the
number of Underlying Shares as would then be issuable upon exercise of the
Warrants (the "CURRENT REQUIRED MINIMUM"), in either case, due to the
unavailability of a sufficient number of authorized but unissued or reserved
shares of Common Stock, then the Board of Directors of the Company shall
promptly prepare and mail to the stockholders of the Company proxy materials
requesting authorization to amend the Company's certificate or articles of
incorporation to increase the number of shares of Common Stock which the Company
is authorized to issue to at least such number of shares as reasonably requested
by the Purchasers in order to provide for such number of authorized and unissued
shares of Common Stock to enable the Company to comply with its issuance,
conversion, exercise and reservation of shares obligations as set forth in this
Agreement, the Certificate of Designation and the Warrants (the sum of (x) the
number of shares of Common Stock then outstanding plus all shares of Common
Stock issuable upon exercise of all outstanding options, warrants and
convertible instruments, and (y) the Current Required Minimum, shall be a
reasonable number). In connection therewith, the Board of Directors shall (a)
adopt proper resolutions authorizing such increase, (b) recommend to and
otherwise use its best efforts to promptly and duly obtain stockholder approval
to carry out such resolutions (and hold a special meeting of the stockholders no
later than the earlier to occur of the 60th day after delivery of the proxy
materials relating to such meeting and the 90th day after request by a holder of
Securities to issue the number of Underlying Shares in accordance with the terms
hereof) and (c) within five Business Days of obtaining such stockholder
authorization, file an appropriate amendment to the Company's certificate or
articles of incorporation to evidence such increase.
