Sunday, March 08, 2015 11:19:39 AM
The initial dealings were 3 rounds of "financing"; $4.5 million for 15,353,512 shares of JAMN stocks. In November 2103, February 2014 and August 2014, because the price of the stock went down, they had to give an additional 11,743,950 shares as a make-good. Then on Sept. 12, 2014, JAMN gave Ironridge an additional 5,000,000 shares to remove the "make-good" clause for the future; and JAMN would never have to give Ironridge any more shares; that means that they gave a total of 16,743,950 - they gave away more shares in make-goods than they did with the original financing! At a price of 17 cents a share, granted, that's only $2,846,471.15, but that means that they gave away value of $7,346,471.5 in order to pay for $4.5 million worth of financing.
Now this still isn't great for Ironridge since their holdings is only worth $5.4 million overall at 17 cents a share, but they took away value from the shareholders and gave it to Ironridge - so even though shareholders shared the risk for the stock, Ironridge didn't.
And what about those 5 million shares that they gave away on September 12th? Granted, it's a hedge against the possibility of the price going down again, but doesn't that mean that Toevs doesn't have faith in the price of the stock?
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