The Cataldo "spin" from Press Release
Under terms of the agreement, Gemini is purchasing 1,666,667 convertible preferred shares at $0.15 per share, approximately a 50% premium over the current market price of OXIS' common shares. The credit line is available to OXIS at a rate of prime plus 2% per year.
"We believe this strategic investment from Gemini represents an important endorsement of our Ergothioneine technology and the potential of our planned line of supplements and nutrition products," said Anthony Cataldo, Chief Executive Officer. "Purchasing shares at an above-market price and providing credit at 'A-class' terms reflects Gemini's confidence in our management team and operating plan.
The Truth from 10Q
C. Conversion Rate . The “ Conversion Rate ” in effect at any time with respect to shares of Series I Preferred Stock shall be the quotient obtained by dividing $0.15 by the Conversion Value, calculated as provided in Section 6D.
D. Conversion Value . The “ Conversion Value ” with respect to shares of Series I Preferred Stock shall initially be $0.15, subject to adjustment in accordance with Sections 6E and 6F hereof.
E. Adjustments to Conversion Value .
(i) Adjustments for Dilutive Issuances of Common Stock . If the Corporation shall at any time issue or sell any shares of its Common Stock at an effective per share offering price less than the Conversion Value as in effect immediately prior to such issuance or sale (the “ Lower Price ”), then the Conversion Value, upon each such issuance and sale, except as hereinafter provided, shall be reduced to such Lower Price.
(ii) Adjustments for Issuance of Warrants, Options and Rights to Common Stock or Convertible Securities . For the purposes of this Section 6F, the issuance, whether directly or indirectly, of any warrants, options, subscriptions, convertible notes or purchase rights with respect to shares of Common Stock and the issuance, whether directly or indirectly, of any securities convertible into or exercisable or exchangeable for shares of Common Stock, or the issuance of any warrants, options, subscriptions, convertible notes or purchase rights with respect to such convertible or exercisable or exchangeable securities (collectively, “ Common Stock Equivalents ”) shall be deemed an issuance at such time of Common Stock if the Net Consideration Per Share (as hereinafter determined) which may be received by the Corporation for such Common Stock shall be less than the Conversion Value in effect at the time of such issuance. Any obligation, agreement or undertaking to issue Common Stock Equivalents at any time in the future shall be deemed to be an issuance at the time such obligation, agreement or undertaking is made or arises. No adjustment of the Conversion Value shall be made under this Section 6E upon the issuance of any shares of Common Stock, which are issued pursuant to the exercise, conversion or exchange of Common Stock Equivalents if any adjustment shall previously have been made upon the issuance of any such Common Stock Equivalents as above provided.
The “ Net Consideration Per Share ” received by the Corporation in respect of the issuance of any Common Stock Equivalents means the amount equal to the total amount of consideration, if any, received by the Corporation (or in the case of convertible notes, the aggregate amount of principal and interest converted) for the issuance of such Common Stock Equivalents plus the minimum amount of consideration, if any, payable to the Corporation upon purchase, exercise, conversion or exchange thereof, divided by the maximum aggregate number of shares of Common Stock that would be issued if all such Common Stock Equivalents were purchased, exercised, exchanged or converted. The Net Consideration Per Share received by the Corporation shall be determined in each instance as of the date of issuance of any Common Stock Equivalents without giving effect to any possible future upward price adjustments or possible future upward rate adjustments which may be applicable with respect to such Common Stock Equivalents.
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(iii) Decreases in Conversion Value; Expiration or Cancellation of Warrants, Options or Rights without Exercise . Should the Net Consideration Per Share for any previously issued Common Stock Equivalents be decreased or increased from time to time for which an adjustment was made to the Conversion Value, then, upon the effectiveness of each such change, the Conversion Value shall be adjusted to such Conversion Value as would have been obtained (1) had the adjustments made upon the issuance of such Common Stock Equivalents been made upon the basis of the actual Net Consideration Per Share of such securities, and (2) had any adjustments made to the Conversion Value since the date of issuance of such Common Stock Equivalents been made to the Conversion Value as adjusted pursuant to clause (1) immediately above. Any adjustment of the Conversion Value which relates to the issuance of particular Common Stock Equivalents shall be disregarded if, as, and when all of such Common Stock Equivalents lapse, terminate, expire or are cancelled without being exercised, exchanged or converted, so that the Conversion Value effective immediately upon such lapse, termination, cancellation or expiration shall be equal to the Conversion Value in effect at the time of the issuance of the lapsed, terminated, expired or cancelled Common Stock Equivalents, with such additional adjustments as would have been made to the Conversion Value had the lapsed, terminated, expired or cancelled Common Stock Equivalents not been issued.
(iv) Consideration Other than Cash . For purposes of this Section 6E, if a part of or all of the consideration received by the Corporation in connection with the issuance of any Common Stock or Common Stock Equivalents consists of property other than cash, such consideration shall be deemed to have a fair market value as is reasonably determined in good faith by the Board.
Floorless conversion i9f any new stock issued at less than .15 with $ .15 set in as a maximum rate.
