Functional Brands resets Series C conversion price to $0.1636 per share
Functional Brands reset its Series C convertible preferred stock conversion price to $0.1636 per share, replacing its previous tiered pricing structure. Preferred holders agreed to waive the prohibition on below-price conversions, eliminating a structural overhang and enhancing capital structure flexibility.
1. Conversion Price Adjustment Agreement
Functional Brands entered into an agreement with holders of its Series C convertible preferred stock to reset the fixed conversion price to $0.1636 per share, replacing the existing tiered conversion prices and allocation structure during the Fixed Conversion Period.
2. Waiver of Below-Price Conversion Prohibition
Under the amended terms, the Company and preferred holders mutually waived the prohibition on conversions below the reset price, enabling immediate conversion opportunities at current market levels.
3. Capital Structure and Overhang Removal
The reset conversion price eliminates a structural overhang on common stock, strengthens capital structure flexibility, and aligns preferred and common stockholder interests, allowing management to focus on growth initiatives without conversion uncertainty.