Torbay exchanges 7.5 million preferreds issued in June PIPE

By Laura Lutz

Des Moines, Oct. 4 - Torbay Holdings, Inc. exchanged 7,500,000 series B preferred shares for an equal number of series C preferred shares.

The series B preferreds, along with 35,000,000 common shares, were issued to The Black Diamond Fund, LLLP in a $1.78 million private placement on June 29.

The series C preferreds carry the following terms:

• The preferreds will have a liquidation preference of $0.60 per share plus accrued dividends;

• Torbay will buy back any outstanding preferreds on Oct. 1 at the liquidation price;

• Each preferred share will be convertible into 10 shares of common stock; and

• Torbay may buy back all, but not part of, the preferreds at any time for $1.00 per preferred.

Torbay has agreed to seek shareholder approval to increase the company's authorized common stock to 400,000,000 shares at a meeting no later than Dc. 31. The company does not currently have enough authorized stock to convert all of the series C preferreds.

Torbay is a computer hardware and software production company based in Mineola, N.Y.

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