What I posted was an example using another companies explanation to the SEC. It explains what happened pretty well. The reason for the lower effective conversion price is because the warrants , even though not paid for fully, represent 50% of the offering value. Therefore the warrants represent 50% of the 15 million offering. You take the conversion price and multiply this by the % the preferred represents and you get our current price after the 2nd conversion price adjustment. Due to this beneficial conversion, they had to book it as a dividend. The dividend is in Q2 statement of operations.
Had Amedica only issued preferred shares in the offering there would be no dividend and no effective conversion price. However its the stated conversion price of .48 that is used calculate how many common shares are issued. Effective conversion price does NOT increase share count, its purely monetary in nature.
This explains why we are currently 50% of the stated conversion price and why there is still conversion going on. Proof of conversion is in the fail to deliver data.
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