Blum Holdings Inc (BLMH)

[Art Vandeley]

Ok, lets compare TRTC's financing deal with Magna with the type of deal described in this article...

link to article
http://www.placementtracker.com/News/PR%2010.11.01%20-%20Cash%20Strapped%20Companies%20Turning%20More%20to%20Toxic%20Loans.htm

link to S1
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=10378308


Article:

The loan, known as an equity credit line, is an increasingly prevalent form of finance for desperate businesses.

S1

This Prospectus relates to the offer and sale of up to 57,416,667 shares of common stock, par value $0.001 (the “Common Stock”), of Terra Tech Corp., a Nevada corporation, by Magna Equities II, LLC, a New York limited liability company (“Magna” or the “Selling Stockholder”) identified on page 25 of this Prospectus. We are registering a total of 57,416,667 shares of Common Stock (the “Total Commitment”), which have been issued or are issuable pursuant to an equity financing facility (the “Equity Line”) established by the terms of the Purchase Agreement described in this Prospectus. The resale of such shares by Magna pursuant to this Prospectus is referred to herein as the “Offering.” We may draw on the Equity Line from time to time, as and when we determine appropriate in accordance with the terms and conditions of the Purchase Agreement.

Article:

The loans, pioneered in the last two years by hedge funds and used by some investment banks including Societe Generale and CIBC World Markets, give the lenders quick up-front fees.

S1:

On December 22, 2014, we entered into the Purchase Agreement with Magna providing for the Equity Line. The Purchase Agreement provides that, upon the terms and subject to the conditions in the Purchase Agreement, Magna is committed to purchase up to 57,000,000 shares of Common Stock over the 24-month term of the Purchase Agreement. We are registering for resale 416,667 shares of Common Stock that were issued upon execution of the Purchase Agreement (the “Initial Commitment Shares”) and 57,000,000 shares of Common Stock that may be issued during the 24-month term of the Purchase Agreement (the “Additional Commitment Shares”; and, together with the Initial Commitment Shares, the “Commitment Shares”).

We agreed to pay to Magna a commitment fee for entering into the Purchase Agreement equal to $125,000 in the form of 416,667 shares of our Common Stock, which we refer to herein as the Initial Commitment Shares, calculated using the closing price of a share of Common Stock as reported on the OTC Market Group, Inc.’s OTCQB tier on the trading day immediately preceding the date of the Purchase Agreement.
We also agreed to pay $20,000 of reasonable attorneys’ fees and expenses incurred by Magna’s counsel in connection with the preparation of the Purchase Agreement and related transaction documents. Further, if we deliver a Draw Down Notice and fail to deliver the Commitment Shares to Magna on the applicable settlement date, and such failure continues for three (3) trading days, we agreed to pay Magna, in addition to all other remedies available to Magna under the Purchase Agreement, an amount in cash equal to 2.0% of the purchase price of such shares for each 30-day period that the shares are not delivered, plus interest.

Article:

On average, companies have received only 15 percent of announced lines, after paying hundreds of thousands of dollars in fees, PlacementTracker.com data shows. Some loan agreements contain provisions that prohibit companies from accessing the line if their stock drops. Other companies find that not enough of their shares trade daily to enable them to tap much of the line.

S1

The maximum number of Additional Commitment Shares requested to be purchased pursuant to any single Draw Down Notice cannot exceed the lesser of (i) 300% of the average daily share volume of the Common Stock in the ten (10) trading days immediately preceding the Draw Down Notice or (ii) such number of shares of Common Stock that has an aggregate value of $750,000, based upon the VWAP of the Common Stock for the ten (10) trading days immediately preceding the Draw Down Notice (the “Maximum Draw Down Amount Requested”). Magna is entitled to additional shares of Common Stock (the “True-Up Shares”) if, during the five (5) trading days after the date of the Draw Down Notice (the “True-Up Calculation Period”), the Market Price of the Common Stock is less than the Market Price during the five (5) trading day period immediately preceding the date of the applicable Draw Down Notice.

Article:

n a typical equity line, the company and the issuer negotiate a maximum amount the company can borrow. The companies tap the lines at their discretion. In return, the lender buys the shares at a discount of between 5 and 10 percent to the stock's current price.

S1:

On December 22, 2014, we entered into the Purchase Agreement with Magna providing for the Equity Line. The Purchase Agreement provides that, upon the terms and subject to the conditions in the Purchase Agreement, Magna is committed to purchase up to 57,000,000 shares of Common Stock over the 24-month term of the Purchase Agreement. We are registering for resale 416,667 shares of Common Stock that were issued upon execution of the Purchase Agreement (the “Initial Commitment Shares”) and 57,000,000 shares of Common Stock that may be issued during the 24-month term of the Purchase Agreement (the “Additional Commitment Shares”; and, together with the Initial Commitment Shares, the “Commitment Shares”).

From time to time over the 24-month term of the Purchase Agreement, commencing on the trading day immediately following the date on which the Registration Statement of which this Prospectus is a part is declared effective by the SEC, we may, in our sole discretion, provide Magna with a draw down notice (each, a “Draw Down Notice”), to purchase a specified number of Additional Commitment Shares (each, a “Draw Down Amount Requested”), subject to the limitations discussed below. The actual amount of proceeds we receive pursuant to each Draw Down Notice (each, a “Draw Down Amount”) is to be determined by multiplying the Draw Down Amount Requested by the applicable purchase price. The purchase price of each Additional Commitment Share equals 95% of the Market Price (as defined below) during the five consecutive trading days immediately preceding the date of the applicable Draw Down Notice. The “Market Price” is the average of the three lowest VWAP’s of the Common Stock in the five (5) trading day period immediately preceding the date of the applicable Draw Down Notice.

Article:

Critics say that the investors begin shorting the company's stock when notified that the company wants to tap the line. In a short sale, an investor borrows shares and sells them in a bet the stock will drop and can be repurchased for a profit. In equity lines, the investors use the discounted shares they receive from the company to repay the shorted stock.

S1

From time to time over the 24-month term of the Purchase Agreement, commencing on the trading day immediately following the date on which the Registration Statement of which this Prospectus is a part is declared effective by the SEC, we may, in our sole discretion, provide Magna with a draw down notice (each, a “Draw Down Notice”), to purchase a specified number of Additional Commitment Shares (each, a “Draw Down Amount Requested”), subject to the limitations discussed below. The actual amount of proceeds we receive pursuant to each Draw Down Notice (each, a “Draw Down Amount”) is to be determined by multiplying the Draw Down Amount Requested by the applicable purchase price. The purchase price of each Additional Commitment Share equals 95% of the Market Price (as defined below) during the five consecutive trading days immediately preceding the date of the applicable Draw Down Notice. The “Market Price” is the average of the three lowest VWAP’s of the Common Stock in the five (5) trading day period immediately preceding the date of the applicable Draw Down Notice.

So, where is the type of financing described in the article different from the deal they did with Magna?


267

Doc

LOL

That article talks about deals that have nothing in common with TRTC's deal with Magna and stocks that can't hold a candle to TRTC.

I give you an "A" for effort, though

167

Sleek