INCOMNET INC. REPORTS CONVERSION OF SHARES.Byline: Gregory J. Wilcox Daily News Staff Writer Incomnet Inc. said Tuesday that the holders of 2,447.9 convertible preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. have converted those shares into 14.6 million shares of common stock at 20 percent discount from the market price. The conversion took place June 10-11 when Incomnet's shares traded in the 5/8 and 7/16 range, respectively. As a result of the conversion, the company has well above the 20 million common shares authorized Shares authorized The maximum number of shares of stock of a company allowed in the articles of incorporation, which may be changed only by a shareholder vote. See: Issued and outstanding. shares authorized See authorized capital stock. in the company's bylaws The rules and regulations enacted by an association or a corporation to provide a framework for its operation and management. Bylaws may specify the qualifications, rights, and liabilities of membership, and the powers, duties, and grounds for the dissolution of an so it plans to call a special meeting of shareholders to vote on a one-for-six reverse stock split. If approved, the company would have about 5 million shares outstanding. The meeting date has not been set, said Melvyn Reznick, Incomnet's chief executive officer. ``The company had to raise money and this was the deal. It's not an unusual thing to have done,'' he said of the stock conversion. It also could help Incomnet's efforts to avoid being delisted by the Nasdaq exchange. In April, exchange officials notified Incomnet that it was not in compliance with listing requirements Listing requirements Requirements, including minimum shares outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading. because its stock had traded below $1 for 30 consecutive trading days and that its net tangible assets Net Tangible Assets Calculated as the total assets of a company, minus any intangible assets such as goodwill, patents and trademarks, less all liabilities and the par value of preferred stock. Also known as "net asset value" or "book value". were below the minimum requirements. On May 14 the exchange notified the company that it had until July 2 to get its stock price above the $1 limit for 10 consecutive trading days and it had until July 15 to comply with the net tangible asset Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. requirement. ``It will be a step on the way to prevent delisting,'' Reznick said. Incomnet markets long-distance service, manufactures and markets bifocal lens, and operates a network that allows automobile dismantlers to buy, sell and trade auto parts. |
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