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Tiger, The US dominance is definitely going to have to fall at some point down the line. The only problem I see with rearranging the global hiearchy, which I would support, is getting the entire global system to agree on certain regulations etc...If one nation cheats it would all crumble down quickly. If there are some improvements in the economy, the trade and budget deficits we could be back to the good ol' US super financial power but that, like you said, could take a while. On the other hand noone can deny the growth and maturity we are seeing in other nations which will soon offer a great deal of competition for the US.
I agree. IMO, Larry does not seem like someone who would let his arms flap. If the strings were the case then why has it taken this long to get going...I'm sure Berry would have been happy to let his arms flap and it seems that is what he was doing and we see where that has put us.
No doubt that Fedex and Rodman would have input as there are integral parts of the entire picture but... it seems Rodman is in because Stambaugh has presented them with what they see as an opportunity for gain based on Larry's plan and "vision". IMO, there is only one person that can run Cryoport and is it's CEO.
There is no immediate threat to the dollar as the reserve currency. An issuance of 300 billion SDR's is not going to cut it or do much. There is no doubt that the Fed is testing the limits of the dollar but there is no immediate alternative to the dollar. No other country at the moment besides the US currently has a stable and trustworthy government (only trustworthy comparitively) with a highly liquid bond market. China has the right to bitch and moan about the dollar but that's about it. All the talk about moving away from the dollar is just IMO idle threats to motivate the Fed to strengthen dollar and nothing more.
This is definitely not my expertise but I was under the impression that if you presented yourself and the plans of your company which would allow the company to meet requirements of the SEC and they consider it of worth, then you could gain approval.
I am not frustrated or pissed off at this point. Everything I have heard up to this point indicates we will soon be in a position to finally act as legitimate company doing business. I am very excited. We have basically traded sideways or trended a bit lower but the fact that we are not even lower should be an indication in itself.
We are pending Nasdaq approval! to be uplisted to COLD and acquire financing. Some people have said they don't think Larry is all that great, but his track record incidates he is and when he wants to accomplish a goal involving a company he is running, it gets done. I personally believe everything that we have seen pending will go through and he will get us rolling through execution efficiency and accomplishing each step of his well constructed and thought out plan. He is not doing this on a whim, he his probably ten steps ahead of all of us.
No one can argue against the fact that "at this point" we don't have much but I would suggest waiting to see plans unfold and giving Cryoport time to develop under Larry's reign.
Yep and no fund manager in their right mind is going to say "sell" at this point because they would probably lose their job and clients, even though at this point "for the long run" it is probably in the best interest for the clients to do so. It's pretty scary because the longer the rally keeps up, the more people start to think there is less of a probability the market will turn down, when in fact the probability increases.
If they advise clients to get out and everyone makes money then the company or fund loses clients and manager loses job, but if they lose when everyone loses well then they still keep clients and their jobs. Managing money is easy these days, just do what everyone else is doing, there is no real formula or analysis needed. LOL!
It really doesn't make much sense to me right now?? While the market is indicating future growth and keeps gaining??,the current state of the economy remains lagging, indicators are dismal, unemployment rates remain elevated and the dollar keeps dropping. Australia has actually raised rates and New Zealand is batting it around while the ECB, Bank of England and the Reserve must keep rates low to prevent currency distortions and prevent any early choke off of the recovery. It's hard to conlude anything other than the market is being inflated by excess liquidity and influences from the PPIP program.....but will burst??
I have to agree with that 100% and from what we've seen, it appears we are about to be in a great position to see what Cryoport is made of as a more effective alternative solution to the current temperature sensitive shipping industry standards...finally...but then again it still is not official.
It's been a whirlwind of work, school, starting to study for CFA, closing on a house, and moving but I really think I just didn't want to look at the stock since my last post.
According to your post, we will know what Larry has done for us in less than 45 - 60 days.
As far as Berry's business vision, I don't think he had much of it. To me it seems like he had some distorted blurry vision that almost had us in the right direction but it takes clarity and real vision in order to execute. Berry didn't know how all the pieces had to go together inside and outside of the company. He couldn't close deals or raise any more capital. He went through $9MM dollars with nothing to show for it but a mountain of debt and I believe you stated before that your belief was that if we had Stambaugh as CEO earlier we would have made better use of that $9MM and I think most of us would agree with that statement.
You are right, if we get no uplisting and subsequently financing, Larry technically has not done much for us besides restructuring CYRX on the inside but there were many pieces that had to go together in order for an uplisting and captial for the commercialization rollout to be possible.
Here is a list from my previous post and whether or not these were, as you suggest the only option and results from Berry's "vision", they were completed in a timely manner by Stambaugh.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=41887327
As always GLTA
I'm late and it's been a minute but I read some posts that were very good. Discipline thanks for that update, it took me a second to find it but very detailed and great!
Larry in Washington doing work sounds promising as well.
It really doesn't matter who is right or wrong on this one but IMO, I believe it's all Stambaugh. Cryoport isn't here today, Rodman support is non-existent, debt is not restructured, and a shareholder supported reverse split does not happen if it wasn't for Stambaugh. That being said a huge thanks has to go to emergent for providing capital to keep Cryo alive. Rodman does get some leeway but that must have taken some very good leadership and vision from our CEO to convince them of our future to get financing locked up and turn this company around from where it was 7 months ago. He has efficiently, step by step setup CYRX for it's best chance at success from his start.
We could what if this and what if that but the fact is that we are very close to a commercial rollout of our precious little Cryoport Express shippers because of Larry Stambaugh. IMO Stambaugh is a dynamo and he continues to prove it.
Tiger, a big congratulations to you sir with your family fortune!!
Cheers to all
GL
Old Timer you are correct capital is tight and we also shouldn't go jumping into bed with any capital firm if we were offered a deal as that is the reason we are in trouble in the first place. To have a financing package in place through Renshaw, a company that prides itself on due diligence, getting their investments to more credible exchanges and achieving good ROI's should not be overlooked.
My guess is because we have accumulated too much debt. Regardless of the story, no venture capital is going to be clamoring to take over millions in debt to see if a company can make it. You have to remember how much money has gone down the drain before Stambaugh arrived. (Something like $10MM) He is the only reason we got Renshaw support and I can't give him enough credit for what he has done since February. The cryoport story is a good one and could be great but has been mismanaged for a long time with respect to money, negotiations and governance within the company. After following CYRX for a while, I finally feel we have a good opportunity to prove our product and feel extremely excited about it.
There are still hurdles that must be overcome such as the vote(I anticipate it passing) and the NASDAQ approval(little worried on this one but we must be presenting something to the Nasdaq review to propel us forward). Obviously we are not there yet but I believe we are closer than we have been in long time.
GLTA
Stockdude, this is my reasoning why I thought the CT was associated with a rental agreement.
This is taken directly from the Rental Agreement filed with the July 1st 10K, which was mentioned in the most recent CT Filing.
I will spare you the entire agreemtent and just post the confidential treatment requested items.
There could be more to it then just a rental agreement, this is just what the latest CT leads me to believe. The Shareholders meeting should clear this up.
______________________________________________________________
"CONFIDENTIAL TREATMENT REQUEST [***] INDICATES INFORMATION THAT HAS BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, THIS INFORMATION HAS BEEN FILED UNDER SEPARATE COVER WITH THE COMMISSION."
Confidential Treatment Requested By CryoPort, Inc.
EACH PARTY’S SIGNATURE BELOW ACKNOWLEDGES THAT SUCH PARTY HAS READ AND UNDERSTANDS EACH OF THE TERMS AND CONDITIONS OF THE AGREEMENT AND AGREES TO BE BOUND BY THEM.
FEDERAL EXPRESS CORPORATION CRYOPORT, INC.
NAME: Jerry Beyl NAME: Larry Stambaugh
TITLE: Vice President FedEx Worldwide Svcs TITLE: Chairman and CEO
______________________________________________________________
Confidential Treatment Requested By CryoPort, Inc.
SCHEDULE 1
CONTAINERS
Model No.: EXP5
Description: The CryPort Express Shipper Model No. EXP 5 is an IATA certified cryogenic dry vapor shipping container which holds 5.5 liters liquid nitrogen and has a full weight of 10.2 kilograms.
Replacement Cost: [***]
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Confidential Treatment Requested By CryoPort, Inc.
SCHEDULE 2
CUSTOMERS AND FEES
Customer: [***]
Billing Party: Lessor
Fees: [***] for each Lease Transaction, for up to 14 calendar days after the applicable Commencement Date
Additional Fees: [***] for each Lease Transaction, if the Container is not returned to Lessor within 14 calendar days after the applicable Commencement Date, for each period of 14 calendar dsays (or portion thereof) thereafter, up to a maximum of [***] for each Lease Transaction
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
http://www.sec.gov/Archives/edgar/data/1124524/000101968709002392/cryoport_10k-ex1016.htm
As always Cheers and GLTA
It looks like it has to do with the rental agreement. When the previous agreement between Fedex and CRYX was filed there were also things that were treated as confidential.
This release.
"CryoPort, Inc. submitted an application under Rule 24b-2 requesting confidential treatment for information it excluded from the Exhibits to a Form 10-K filed on July 1, 2009."
The information that was excluded from the July 1st 10k were replacement costs, customer, and fees and it could be additional information as well.
I like it. This is a good indication that something of merit is going on behind closed doors.
This means little for the stock price but here is an article that mentions Cryoport.
http://www.computerworlduk.com/community/blogs/index.cfm?entryid=2563&blogid=23
Assessing the maturity of cloud computing services
October 05, 2009
Posted by: James Staten ShareThis
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The number one challenge in cloud computing today is determining what it really is, what categories of services exist within the definition and business model and how ready these options are for enterprise consumption.
Forrester defines cloud computing as a standardised IT capability (services, software, or infrastructure) delivered via Internet technologies in a pay-per-use, self-service way.
While definition is crucial to having a fruitful discussion of cloud, the proper taxonomy and maturity of these options is more important when planning your investment strategy.
To this aim, Forrester has just published our latest Tech Radar that maps the existing cloud service categories (not the individual vendors within each category) along maturity and value impact lines to help you build your strategic roadmap.
The report identified 11 service categories that fall into three classes of cloud services – software you rent (Software-as-a-service, or SaaS), middleware services and platforms that help developers build cloud-based applications, and infrastructure services and platforms that are places to deploy cloud applications.
Note that we did not restrict the second and third categories to Platforms-as-a-service (PaaS) and Infrastructure-as-a-service (IaaS) platforms – because there is value in discrete middleware and infrastructure services in the cloud just as there is in your datacentre.
While Amazon Web Services is clearly an IaaS leader providing a robust set of compute, storage and middleware services, there are also discrete offerings, like Boomi’s cloud integration service that does no more than integration and does not need to be a full platform player to be valuable. In fact there can be significant advantage that comes from this type of focus on just one thing.
Oracle’s Larry Ellison continues to grab headlines for his assertion that the cloud isn’t anything new and to his credit he’s at least half right.
Just because applications are delivered from a cloud infrastructure doesn’t mean any of the aspects of application design or components of a service-oriented architecture don’t apply – in fact they have just as much relevance as they did on-premise.
But how these services are delivered is what is different. There is a clear difference between an on-premise, single instance deployment of TIBCO and the highly scalable, multi-tenant integration service from Boomi.
Tenancy, shared economics, virtualised deployment, and cloud service-to-service integration are game changers for those who are using these services. Not only do they bring potential cost advantage to applications that might otherwise have been deployed on-premise but they create opportunities for new business applications that simply wouldn’t be feasible any other way.
That’s clearly the case for Cryoport, a maker of cryogenic containers for live medical tissue.
Delivering these materials safely was very hands-on and expensive until cloud computing came along. Same with genome research; medical research universities and pharmaceutical companies had to make large investments in HPC labs to crunch the massive volumes of DNA data, until cloud computing economics came along.
But cloud computing isn’t the be-all, end-all that many portray and they can’t suit all uses today and may not in the future either. Thus it behooves you to build your roadmap using guideposts to the maturity and applicability of these emerging options.
We hope this report helps you bound and plan your cloud investments and look forward to your feedback on how we can assist further.
By James Staten
GLTA
Cheers tiger, I appreciate and enjoy your insight as well. You are obviously experienced and knowledgeable when it comes to the markets, the economy and global money flow. Good article regarding the yen carry trade. I didn't know much about it but we have been covering it a great deal in my classes this fall so very interesting read. Should be interesting what happens to our global reserve currency as being the current funding currency for carry trades. Also, I read an article for the first yuan issuance to in an attempt to get the yuan away from a closed currency albeit not in a country not governed by China, I still believe we remain the reserve currency for some time.
I was taught very quickly with the help of a senior analyst at my work that if I am going to state my belief of where I believe a clients interest rate risk is, I damn well better have a good reason for what I am saying. When it comes to Cryoport I try to remain objective but probably to get subjective because I really like Stambaugh am trying to hit it big with CYRX to get some change in my pocket to start me off. I believe that at this time CYRX has a good chance to become a successful company, IMO.
I don't generally actively manage my account, I typically don't have the time to do that and honestly do not have much experience in the arena of active management but anticipate getting into it more as I gain more understanding of the tools available and market flows. I have liked some of the calls on the board, I have never actually participated in someones prediction but generally followed them if someone called them out. I do try to follow the economy and markets extensively as my work and school require me to do so.
Gold has become a fad of late and everyone is definitely long gold at this time but the hardest question is obviously when will the trend break. I certainly understand your positions and reasons for them.
Why canadian stocks? (Because a good number of mining and precious metal companies?) My understanding is that they will perform when risk appetites have increased and I am assuming from previous posts that you might have a gloomy outlook on the economy.
Also.... I have read other boards and this one by far has the most well rounded contributing posters.
GLTA
CYRX!!
I think it is in the best interest of the globe to strengthen the dollar because China has too much at stake and is the reason they continue to give us money even though our GOVT balance sheet basically indicates we are already bankrupt. Gold is a tough one. It could be reaching highs but there are also more gold etf's created which is allowing more and more investors access to gold increasing it's volatility and effects from speculation. I think the dollar holds and creeps up but I also believe gold will continue it's rally as speculation drives it up. But if you are short when gold goes, gold will drop FAST.
There is always risk when buying individual stocks. We are essentially saying we are smarter than the market. Time will tell if we are smarter than the market. If cyrx does hit you will earn more money than you would trading indexs or etf’s, but obviously you shouldn’t have your pension on CYRX and the earnings power wouldn't be present if it wasn't risky.
I personally believe Larry Stambaugh has done a great job and numerous things to get this company in the right direction. This by no means indicates success is in the bag, but I like the odds and what he has accomplished in the short 7 months he has been CEO. (PB was given 4 years and now some call out Stambaugh in less than a year after coming in with HUGE amounts of debt on the brink of collapse.)
He has Restructured debt, twice now which shows continued confidence in him and his plans going forward with Cryoport.
Raised over $1million through public offerings and warrant exercises, which is anticipated to continue.
Kept the burn rate under control, which is anticipated to continue.
Continued testing of the product to establish its credibility. Data logger release
Achieved an initial agreement with Fedex that clearly contained verbiage from Fedex about it’s confidence in the product and an indication of it’s belief in the future prospects of CYRX.
Brought in well qualified personnel throughout the company many of which must believe that there is success in the companies future, one of which (CFO) some how created net income for the company, albeit through accounting procedures. That is one smart accountant.
Established governance committee and updgraded the audit committee, both of which are needed to be uplisted.
Provided more shareholder communication than PB ever had.
Positioned the company very well for the future with respect to what customers perceive as a legitimate company.
I don’t think the trouble Stambaugh is having with getting financing has anything to do with the technology, I think it has more to do with mounting debt the has been accumulated over the years from PB’s reign and of which I believe Stambaugh will handle.
According to Tiger, most companies take 12 years to reach fruition and if you look at timing of Cryoports inception, that would put us right in line to be successful over the next 2 years.
AMENDMENT TO DEBENTURES AND WARRANTS, AGREEMENT AND WAIVER
http://www.sec.gov/Archives/edgar/data/1124524/000101968709003423/cryx_8k-ex0415.htm
THIS AGREEMENT AND WAIVER (this “Agreement”) is entered into on September 1, 2009 (the “Effective Date”) by and among Cryoport, Inc., a Nevada corporation (the “Company”), on the one hand, and Enable Growth Partners LP (“EGP”), Enable Opportunity Partners LP (“EOP”), Pierce Diversified Strategy Master Fund LLC, Ena (“Pierce”, together with EGP, EOP and Pierce, the “Enable Funds”), and BridgePointe Master Fund Ltd. (“BridgePointe,” together with the Enable Funds, each individually referred to as a “Holder” and collectively as the “Holders” or the “Investors”), on the other hand. Capitalized terms not defined in this Agreement shall have the meanings ascribed to such terms in each of the Securities Purchase Agreements (each as defined in documents referred to in the recitals incorporated by reference below), in each of the Debentures (each as defined in documents referred to in the recitals incorporated by reference below).
WHEREAS, the Company and the Holders are parties to that certain Amendment to Debentures and Warrants, Agreement and Waiver entered into on February 19, 2009, and effective as of January 27, 2009 (the “February 2009 Amendment Agreement”);
WHEREAS, all recitals contained in the February 2009 Amendment Agreement are hereby incorporated into this Agreement by this reference;
WHEREAS, by letter dated July 31, 2009, the Holders agreed to extend the Monthly Redemption Date from August 1, 2009, to September 1, 2009; and
WHEREAS, the Company and the Holders now desire that the terms of the Debentures, Warrants and other Transaction Documents, as such have been modified by the mutual agreement of the parties as of the date hereof, be modified and have entered into this Agreement to document their agreement regarding such modifications.
NOW THEREFORE, in consideration of the mutual promises and agreements contained herein, and intending to be legally bound hereby, the undersigned parties hereby agree as follows:
Incorporation of Preliminary Statements. The Recitals set forth above by this reference hereto are hereby incorporated into this Agreement.
1. Amendment to Covenant to Increase Authorized Shares. Section 2 of the February 2009 Amendment Agreement is hereby deleted in its entirety and replaced with the following:
“Increase in Authorized Shares. In addition to any existing obligations of the Company under the Transaction Documents (as defined in the Securities Purchase Agreements, respectively), the Company shall hold a shareholders meeting (following the requirements set forth in the Company’s bylaws) as soon as reasonably practicable following the date of this Agreement, but in any event by not later than October 31, 2009, and put before the shareholders a proposal to increase authorized shares of common stock from 125,000,000 to 250,000,000. The Company shall use its best efforts to obtain shareholder approval of an increase in such authorized number of shares of common stock. This provision is intended to modify the like covenant contained in the February 2009 Amendment Agreement.”
1
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If the Company shall fail to have a sufficient number of shares authorized and reserved to the Holders by December 31, 2009 to effect the full conversion of all then outstanding Debentures and the full exercise of all then outstanding Warrants, regardless of the reason and regardless of whether or not the Company shall have used its best efforts to obtain such shareholder approval, such failure shall constitute an Event of Default under the Debentures and the Warrants. Each Holder agrees to vote its shares FOR the proposal to amended to the Company’s Amended and Restated Articles of Incorporation to increase its authorized common stock to 250,000,000 shares.
2. Amendment to Warrants. Each of the Warrants (where “Warrants,” as used herein, shall have the meaning set forth in the February 2009 Amendment Agreement) are hereby amended to add the following, immediately after Section 5 of each of the Warrants, as a new Section 6:
“6. Default and Redemption.
(a) Events of Default. Each of the following events which occur while any Warrants are outstanding shall be considered to be an “Event of Default”:
(i) Failure To Authorize and Reserve Common Stock. At any time after December 31, 2009 the Company, for any reason or no reason, does not have a sufficient number of shares of common stock authorized and reserved for issuance to the Holder to effect the exercise of the total number of outstanding shares of this Warrant (a “Share Reservation Default”);
(ii) Failure To Deliver Common Stock. The Company shall have failed, for any reason, to deliver to the Holder certificates evidencing the Warrant Shares which are subject to a Notice of Exercise by the Warrant Share Delivery Date and such failure remains uncured for a period of more than 3 Trading Days.
(b) Mandatory Redemption; Certain Adjustments on Default.
(i) Mandatory Redemption Amount. In addition to any other damages allowed under the terms of this Warrant or the Transaction Documents, if any Events of Default shall occur and any such Event of Default continues for an additional 3 Trading Days after the Holder provides written notice to the Company that an Event of Default has occurred and specifying the factual basis therefor, then thereafter, unless waived by the Holder, upon the occurrence and during the continuation of any Event of Default, at the option of the Holder, each such option exercisable through the delivery of one or more written notices to the Company by such Holder (a “Redemption Notice”), the Specified Amount (as defined below) of this Warrant shall be immediately redeemed by the Company and the Company shall pay to the Holder (a “Mandatory Redemption”) an amount (the “Mandatory Redemption Amount” or the “Default Amount”) equal to 100% of the greater of (i) the Black-Scholes value of the Specified Amount (as defined below) of this Warrant on the date of such Default Notice and (2) the highest Black-Scholes value of the Specified Amount (as defined below) of this Warrant from the date of such Redemption Notice (or, in the case of a failure to deliver Warrant Shares following an Exercise, from the date of the applicable Exercise) through the Trading Day that the Mandatory Redemption Amount is paid to the Holder. Each Redemption Notice shall specify the amount (the “Specified Amount”) of the Warrant that is subject to a Mandatory Redemption, which may constitute all or any part of the Unexercised Portion of the Warrant that has not been covered in a prior Redemption Notice. For purposes hereof, “Unexercised Portion” shall mean the number of shares outstanding and unexercised with respect to the Warrant in question, plus any and all shares issuable upon any previously submitted notice of exercise of the Warrant which have not yet been delivered to the Holder, in each case as of the date in question. For purposes of clarity, a Mandatory Redemption as to a given Warrant shall be triggered only by a written Default Notice from the Holder of the Warrant and the delivery of a Default Notice by one Holder as to its Warrant does not trigger a Mandatory Redemption by any other Holder as such other Holder’s Warrant.
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The Mandatory Redemption Amount shall be payable, in cash or cash equivalent, within five (5) business days of the Date of the applicable Default Notice (the “Default Amount Due Date”). If the Company fails to pay the Default Amount within five (5) Business Days of written notice that such amount is due and payable (the “Default Amount Due Date”), then interest shall accrue thereon at a rate of eighteen percent (18%) per annum, compounded monthly (or the maximum amount allowed by applicable law, whichever is less.
(ii) Liquidated Damages. The parties hereto acknowledge and agree that the sums payable as liquidated damages or pursuant to a Mandatory Redemption shall give rise to liquidated damages and not penalties. The parties further acknowledge that (i) the amount of loss or damages likely to be incurred by the Holder is incapable or is difficult to precisely estimate, (ii) the amounts specified bear a reasonable proportion and are not plainly or grossly disproportionate to the probable loss likely to be incurred by the Investor, and (iii) the parties are sophisticated business parties and have been represented by sophisticated and able legal and financial counsel and negotiated this Agreement at arm’s length.
The Default Amount, together with all other amounts payable hereunder, shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to Exercise all other rights and remedies available at law or in equity.”
3. Addition of Future Interest Accrual to Outstanding Principal Amounts of the Debentures. The Company and the Holders agree that the outstanding principal amount of each Debenture shall be increased on the Effective Date by an amount equal to all accrued and unpaid interest as of the Effective Date (the “Accrued Interest”), plus all interest that would have accrued on the principal amount plus the Accrued Interest such Debenture from the Effective Date to the Maturity Date, without giving effect to any potential payments of the Monthly Redemption Amount during such period (the “Future Interest Amount”). Schedule “A” attached hereto reflects the new outstanding principal amount of each of the respective September 2007 Convertible Debentures and May 2008 Convertible Debentures, as of the Effective Date after giving effect to the addition of the Future Interest Amount. As a result of the foregoing, the Company shall have no obligation to make the quarterly interest payments on the Monthly Interest Payment Date required by the Debentures from the Effective Date to the Maturity Date, and interest shall cease to accrue during such period.
4. Adjustment to Conversion Price of the Debentures. The definition of “Conversion Price” in Section 4(b) of each of the Debentures is hereby deleted and replaced in its entirety with the following:
“Conversion Price. The conversion price in effect on any Conversion Date shall be equal to the average of the VWAPs for each of the trading days from July 1, 2009 through August 30, 2009, which the parties agree is equal to $0.45, subject to adjustment herein (the “Conversion Price”).”
3
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5. Amendment to Monthly Redemption Date of the Debentures. The definition of “Monthly Redemption Date” in Section 1 of each Debenture and in the Amendment to Original Issue Discount 8% Senior Secured Convertible Debentures, dated the 19th of February 2008, is hereby deleted and replaced in its entirety with the following:
“Monthly Redemption Date” means the 1st of each month, commencing immediately upon January 1, 2010, and terminating upon the full redemption of this Debenture.
6. Amendment to Monthly Redemption Amount of the Debentures. The definition of “Monthly Redemption Amount” in Section 1 of each Debenture and in the Amendment to Original Issue Discount 8% Senior Secured Convertible Debentures, dated the 19th of February 2008, is hereby deleted and replaced in its entirety with the following:
“Monthly Redemption Amount” means an amount equal to the Holder’s Pro Rata Share (as defined in the February 2009 Amendment Agreement) multiplied by $200,000, which the parties agree shall equal the amount set forth to each respective Holder’s name in the table below:
Orig
Date
Holder
Pro Rata
Share Holder’s Monthly
Redemption
Amount
May-08 BridgePointe Master Fund Ltd. 22.60% $45,200.00
Sep-07 BridgePointe Master Fund Ltd. 25.60% $51,200.00
Sep-07 Enable Growth Partners LP 43.10% $86,200.00
Sep-07 Enable Opportunity Partners LP 7.60% $15,200.00
Sep-07 Pierce Diversified Strategy Master Fund LLC, Ena 1.10% $2,200.00
TOTAL: $200,000.00
7. Amendments to Section 10 of the February 2009 Amendment Agreement. The first paragraph and definition section in Section 10 of the February 2009 Amendment Agreement are hereby deleted in their entirety and replaced with the following:
“Equity Dilution Adjustment to Number of Warrants. In consideration of the terms hereof, from the date hereof through and including December 31, 2010, anytime that the Company issues equity securities or securities that are convertible or exchangeable into equity securities (as applicable, a “Triggering Issuance”), including but not limited to securities issued in an Exempt Issuance (as defined below) and immediately following any such offering, the sum of all of the Holders’ Augmented Fully Diluted Amounts (as defined below) is less than 34.5% of Company Fully Diluted Amount (as defined below), the Company shall issue to each Holder a number of warrants (the “Makeup Warrants”) equal to (a) the Holder’s Pro Rata Share (as defined below) of the Minimum Fully Diluted Amount, where the “Minimum Fully Diluted Amount” shall mean 34.5% of the Company Fully Diluted Amount (as defined below) immediately following the Triggering Issuance, less (b) the Holder’s Augmented Fully Diluted Amount immediately prior to the Triggering Issuance.
For purposes hereof,
“Company Fully Diluted Amount” shall mean the fully diluted number of shares of common stock of the Company at the time in question, including but not limited to securities issued in Exempt Issuances.
“Exempt Issuance” shall have the meaning ascribed to it in the Securities Purchase Agreement dated September 27, 2007.
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“Holder’s Augmented Fully Diluted Amount” shall mean the sum of (i) the number of shares of common stock that would be issuable upon the full conversion of Holder’s Debentures (including principal amounts and accrued and unpaid interest) and upon the full exercise of all of the Holder’s Warrants, in each case as of the date of the applicable Triggering Issuance and in each case without regard to any contractual limitations on the amount that can be converted or exercised, plus (ii) the number of shares of Common Stock of the Company that have been previously issued to the Holder by the Company pursuant to the conversion of the Holder’s Debentures and the exercise of the Holder’s Warrants, and in payment of interest accruing on the Debentures, since their respective issuance dates, and regardless of whether or not such shares of Common Stock have been sold by the Holder.
“Pro Rata Share” shall mean the principal amount of Debentures held by Holder as of immediately following the effectiveness of the February 2009 Amendment Agreement, divided by the aggregate principal amount of Debentures held by all Holders as of immediately following the effectiveness of the February 2009 Amendment Agreement. For purposes of clarification, each Holder’s Pro Rata Share shall be as follows (the amounts set forth in the following table shall govern absent manifest error):
Orig Date Holder Pro Rata Share
May 2008 BridgePointe Master Fund Ltd. 22.6%
Sep 2007 BridgePointe Master Fund Ltd. 25.6%
Sep 2007 Enable Growth Partners LP 43.1%
Sep 2007 Enable Opportunity Partners LP 7.6%
Sep 2007 Pierce Diversified Strategy Master Fund LLC, Ena 1.1%
It is further understood that any issuance of shares of common stock, warrants, securities convertible or exchangeable into common stock or options to anyone, including but not limited to employees, officers, directors or consultants of the Company shall be subject to the 34.5% Agreement calculation above regardless of whether or not such issuances are otherwise considered to be “Exempt Issuances.” It is also understood that the rights afforded to the Company under the definition of Exempt Issuance in each of the Securities Purchase Agreements remain, provided that no right is granted hereby to issue any securities which the Transaction Documents otherwise prohibit.
It is expressly understood that this section does not modify the full ratchet anti-dilution rights (including but not limited to Section 5 of the Debenture and Section 3 of the Warrants) currently afforded to the Holders of the existing Debentures and Warrants (as defined herein). Issuances that are exempt issuances under the Transaction Documents, including issuances that are Exempt Issuances under Section 5 (b) of the Debentures, are not exempt from inclusion for the purposes of the 34.5% calculation above.
The Makeup Warrants shall be in the same form as the original Warrants issued, except that the Exercise Price of the Makeup Warrants shall equal the lesser of (i)the issuance price per share of the equity securities that triggered the issuance of the Makeup Warrants (the “Triggering Issuance”) and (ii) the average of the VWAPs for the five (5) consecutive trading days ending on the date of such Triggering Issuance, and the “Termination Date” of each Makeup Warrant shall be five (5) years from its date of issuance. Each of the Transaction Documents is hereby amended such that any reference to “Warrants” therein shall include the Makeup Warrants and any reference to “Warrant Shares” shall include the shares issuable upon exercise of the Makeup Warrants.”
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8. Adjustment to Warrant Exercise Price, Antidilution Adjustment to Number of Warrants and Extension of Term of Warrants:
(a) In consideration for the terms hereof, the Exercise Price (as defined in each of the Warrants) of each of the Warrants (as “Warrants” is defined in the 2007 Securities Purchase Agreement and the May 2008 Securities Purchase Agreement, respectively) is hereby decreased to $0.45, subject to further adjustment therein.
(b) In consideration for the terms hereof, and pursuant to the terms of the Warrants as a result of the decrease in the Exercise Price to $0.45, the number of shares of the Warrants underlying the May 2008 Convertible Debenture Holders, respectively, are hereby increased as shown in the table attached as Schedule “B” hereto, and the number of Warrants underlying the September 2007 Debentures of the Enable Funds, respectively, are hereby proportionally increased by mutual agreement as shown in the table attached as Schedule “B” hereto.
(c) The Company agrees to promptly issue amended and restated Warrants, reflecting the adjusted terms and adjusted number of shares described herein.
9. Amendments to Debenture.
(a) “Section 9 Additional Covenants” of the Debentures, which was added to each of the Debentures by virtue of the February 2009 Amendment Agreement, is hereby amended and replaced with the following:
“Section 9 Additional Covenants. The Company agrees to abide by the following covenants. Such covenants which will remain effective so long as any of the Debentures remain outstanding (the “Covenant Period”):
a. The Company shall maintain a total cash balance of no less than $100,000 at all times during the Covenant Period.
b. The Company shall have an average monthly operating cash burn of no more than $500,000 during the Covenant Period. Operating cash burn is defined by taking net income (or loss) and adding back all non-cash items, and excludes changes in assets, liabilities and financing activities (i.e. the top section of the Consolidated Statement of Cash Flows as publicly reported in the Company’s Consolidated Financial Statements).
c. The Company shall have a minimum current ratio of 0.5 to 1 at all times during the Covenant. This calculation is to be made [by excluding the current portion of the convertible notes payable and accrued interest, and liability from derivative instruments from current liability for the current ratio.
d. Accounts Payable shall not exceed $750,000 at any time during the Covenant Period.
e. Accrued Salaries shall not exceed $350,000 at any time during the Covenant Period.Acc
f. The Company shall not make any revisions to the terms of the existing contractual agreements for the Notes Payable to Former Officer, Related Party Notes Payable and the Line of Credit (as each is referred to in the Company’s Form 10-Q for the period ended June 30, 2009). The foregoing covenant shall not apply to the amendment made by the Company to the terms of a note payable to Peter Berry (“Berry”) which was effective August 26, 2009, pursuant to which (i) the Company agreed to pay Berry the sum of $30,000 plus accrued interest representing past due payments from January to May 2009 previously waived by Berry, (ii) Berry agreed to waive payments due to him through December 2009, and (iii) the Company agreed to pay to Berry the sum of $42,000 plus accrued interest on January 1, 2010, representing payments due to him from June 2009 thru December 2009.
In the event that the Company fails to comply with any of the covenants set forth in Section 9 above (a “Covenant Failure”), such failure shall constitute an Event of Default under the September 2007 Debenture and the May 2008 Debenture. The Company shall notify the debt holders within five (5) business days of the Company’s knowledge of any Covenant Failure, provided that, the Company shall not provide the debt holders with notification of any Covenant Failure if any debt holder has requested not to be provided with such information for a specified period of time. In the event that the Company notifies the debt holders of Covenant Failure, then, the Company shall publicly disclose such Covenant Failure on a Form 8-K within five (5) business days of such disclosure to debt holders, or as otherwise required by the rules of the Securities Exchange Commission.”
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(b) The following is added to the end of Section 6(a) of the Debenture:
“Notwithstanding the above, the Company shall not be entitled to deliver an Optional Redemption Notice unless the closing price of the Company’s common stock shall have exceeded $0.70 (subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the Original Issue Date) on each of the 10 Trading Days up through and including the Optional Redemption Notice Date and shall not be entitled to complete an Optional Redemption unless the closing price of the Company’s common stock shall have exceeded $0.70 (subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the Original Issue Date) on each of the 20 Trading Days immediately preceding the Optional Redemption Date.”
For purposes of clarity, except for the addition referred to above, Section 6(a) of the Debenture remains unchanged and in full force and effect.
10. Amendment to Securities Purchase Agreement. Section 4.1(c)(iii) of each of the Securities Purchase Agreements is hereby amended to add the following language to the end of such subsection:
“. . . or any succeeding rule, including but not limited to Rule 144(b)(1).”
11. Tacking and Affiliate Opinion. It is the intention of the Holders and the Company that the Rule 144 holding periods for the shares issuable upon conversion of the Debentures and exercise of the Warrants (each as amended pursuant to agreements of the parties, including but not limited to this Agreement) will tack to, and run from, the Original Issue Dates of the Debentures and the Warrants, and the Company hereby acknowledges such tacking (the “Hold Period Tacking”). The Company shall cause its outside legal counsel to provide an opinion of counsel confirming the Hold Period Tacking of such holding periods regarding the Debentures and the Warrants, in each case as amended hereby (the “Tacking Opinion”). At such time as the Included Holders or transfer agent shall so require in connection with the conversion of a Debenture or the exercise of a Warrant, the Company shall provide the Tacking Opinion, signed by Company’s counsel, to the Included Holders or the transfer agent.
The Company accepts, and represents and acknowledges that its outside counsel has accepted, the legal opinion of the Law Office of Otto E. Sorensen, APC, delivered to the Company’s transfer agent, Integrity Stock Transfer, on or about September 8, 2009, as amended by the e-mail from Otto E. Sorensen dated on or about September 11, 2009 (collectively, the “Affiliate Opinion”), which opines that BridgePointe Master Fund Ltd. is not an affiliate of the Company for purposes of Rule 144 promulgated under the Securities Act of 1933, as amended, based upon the facts as they exist as of September 8, 2009, and after assuming and accounting for the execution and performance of this Agreement. The Company shall provide a letter (the “Counsel Acceptance Letter”), signed by its outside counsel, stating that such counsel accepts the Affiliate Opinion, prior to and as a condition to the effectiveness of this Agreement. Said acknowledgement, and counsel’s acceptance of the Affiliate Opinion, are not binding on the Company nor its counsel in the event of a material change in the facts and circumstances relating to BridgePointe’s ownership of Company securities and ability to exercise control over the Company as they exist on the September 8, 2009, and after assuming and accounting for the execution and performance of this Agreement, as determined by Company counsel in its reasonable discretion.
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12. Effect on Transaction Documents. Subject to the waivers and amendments provided herein, all of the terms and conditions of the Transaction Documents shall continue in full force and effect after the execution of this Agreement and shall not be in any way changed, modified or superseded by the terms set forth herein, including but not limited to, any other obligations the Company may have to the Investors under the Transaction Documents provided however that references to Securities, Debentures, Warrants and Underlying Shares in the Transaction Documents shall include such securities, as amended hereby, and the shares underlying such Securities, respectively. Except as expressly set forth herein, this Agreement shall not be deemed to be a waiver, amendment or modification of any provisions of the Transaction Documents or of any right, power or remedy of the Investors, or constitute a waiver of any provision of the Transaction Documents (except to the extent herein set forth), or any other document, instrument and/or agreement executed or delivered in connection therewith, in each case whether arising before or after the date hereof or as a result of performance hereunder or thereunder. The Investors reserve all rights, remedies, powers, or privileges available under the Transaction Documents, at law or otherwise. This Agreement shall not constitute a novation or satisfaction and accord of the Transaction Documents or any other document, instrument and/or agreement executed or delivered in connection therewith, including, without limitation, the Security Agreement.
13. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the applicable Transaction Document.
14. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of the Investors. The Company may not assign (except by merger) its rights or obligations hereunder without the prior written consent of the Investors. The Investors may assign their respective rights hereunder in the manner and to the Persons as permitted under the applicable Transaction Document.
15. Execution and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
16. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Transaction Documents.
17. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
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18. Headings. The headings in this Agreement are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
19. Effectiveness. The effectiveness of this Agreement shall be expressly conditioned upon the Investors’ receipt, on or before the date hereof, of (i) a certificate, dated as of the date hereof, executed by the Chief Executive Officer of the Company certifying that, to the best knowledge of the Chief Executive Officer after reasonable investigation, no Event of Default, except as expressly waived in this Agreement, and no event which, with the giving of notice or passage of time (or both), would constitute an Event of Default under the Debentures has occurred or is continuing, and (ii) all documents required to be delivered by the Company hereunder, including but not limited to the Counsel Acceptance Letter, shall have been executed and delivered to the Investors. In the event the foregoing items are not delivered to the Investors, all of the consents, amendments and waivers of the Investors contained herein shall be null and void. The effectiveness of this Agreement shall also be expressly conditioned upon the accuracy of all of the representations and warranties of the Company and the performance by the Company (and all of its subsidiaries) of their obligations under this Agreement.
20. Representations and Warranties; Corporate Authority. The Company hereby makes the representations and warranties set forth below to the Holders that as of the date of its execution of this Agreement:
(a) The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of such Company and no further action is required by such Company, its board of directors or its stockholders in connection therewith. This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
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(b) The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other material instrument (evidencing Company debt or otherwise) or other material understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected.
(c) No consideration has been offered or paid to any person to amend or consent to a waiver, modification, forbearance or otherwise of any provision of any of the Transaction Documents.
(d) All of the Company’s warranties and representations contained in this Agreement shall survive the execution, delivery and acceptance of this Agreement by the parties hereto.
21. Amendments and Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and the Holders or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.
22. Joint Preparation. Each of the parties hereto acknowledges that this Agreement has been prepared jointly by the parties hereto, and shall not be strictly construed against either party.
23. Amendments Not Effective Until All Parties Agree. The amendments herein shall not be effective unless and until the Company, its undersigned subsidiaries and all of the Holders of the Debentures shall have agreed to the terms and conditions hereunder.
24. Disclosure and Filing of 8-K. Except with respect to the material terms and conditions of the transactions contemplated by this Agreement, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Investors or their agents or counsel with any information that it believes constitutes or might constitute material, nonpublic information. On or before the second (2nd) Trading Day immediately following the date hereof, the Company shall file a Current Report on Form 8-K, reasonably acceptable to each Investor disclosing the material terms of the transaction contemplated hereby, which shall include this Agreement as an attachment hereto.
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25. INDEPENDENT NATURE OF INVESTORS’ OBLIGATIONS AND RIGHTS. THE COMPANY HAS ELECTED TO PROVIDE ALL INVESTORS WITH THE SAME TERMS AND FORM OF THIS AGREEMENT FOR THE CONVENIENCE OF THE COMPANY AND NOT BECAUSE IT WAS REQUIRED OR REQUESTED TO DO SO BY THE INVESTORS. THE OBLIGATIONS OF EACH INVESTOR UNDER THIS AGREEMENT, AND ANY TRANSACTION DOCUMENT ARE SEVERAL AND NOT JOINT WITH THE OBLIGATIONS OF ANY OTHER INVESTOR, AND NO INVESTOR SHALL BE RESPONSIBLE IN ANY WAY FOR THE PERFORMANCE OR NON-PERFORMANCE OF THE OBLIGATIONS OF ANY OTHER INVESTOR UNDER THIS AGREEMENT OR ANY TRANSACTION DOCUMENT. NOTHING CONTAINED HEREIN OR IN ANY TRANSACTION DOCUMENT, AND NO ACTION TAKEN BY ANY INVESTOR PURSUANT THERETO, SHALL BE DEEMED TO CONSTITUTE THE INVESTORS AS A PARTNERSHIP, AN ASSOCIATION, A JOINT VENTURE OR ANY OTHER KIND OF ENTITY, OR CREATE A PRESUMPTION THAT THE INVESTORS ARE IN ANY WAY ACTING IN CONCERT OR AS A GROUP WITH RESPECT TO SUCH OBLIGATIONS OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE TRANSACTION DOCUMENTS. EACH INVESTOR SHALL BE ENTITLED TO INDEPENDENTLY PROTECT AND ENFORCE ITS RIGHTS, INCLUDING WITHOUT LIMITATION, THE RIGHTS ARISING OUT OF THIS AGREEMENT OR OUT OF THE OTHER TRANSACTION DOCUMENTS, AND IT SHALL NOT BE NECESSARY FOR ANY OTHER INVESTOR TO BE JOINED AS AN ADDITIONAL PARTY IN ANY PROCEEDING FOR SUCH PURPOSE. EACH INVESTOR HAS BEEN REPRESENTED BY ITS OWN SEPARATE LEGAL COUNSEL IN THEIR REVIEW AND NEGOTIATION OF THIS AGREEMENT AND THE TRANSACTION DOCUMENTS.
IN WITNESS WHEREOF, the parties have duly executed this Amendment to Debentures and Warrants, Agreement and Waiver as of the date first written above.
CRYOPORT, INC.
By: /s/ Larry G. Stambaugh
Name: Larry G. Stambaugh
Title: Chief Executive Officer
[signature page Holders/Investors follows]
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Convertible Debenture Holders’ Signature Page
BRIDGEPOINTE MASTER FUND LTD.,
a Cayman Islands Exempted Company
By: /s/ Eric S. Swartz
Name: Eric S. Swartz
Title: Director
ENABLE GROWTH PARTNERS LP
By: /s/ Adam Epstein
Name: Adam Epstein
Title: Principal
ENABLE OPPORTUNITY PARTNERS LP
By: /s/ Adam Epstein
Name: Adam Epstein
Title: Principal
PIERCE DIVERSIFIED STRATEGY MASTER
FUND LLC, Ena
By: /s/ Adam Epstein
Name: Adam Epstein
Title: Principal
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SCHEDULE "A"
Orig Date Convertible Debenture Holder Outstanding Principal Amount Accrued and Unpaid Interest as of August 31, 2009 Future Interest Amount as of July 1, 2010 New Outstanding Principal Amount
May 2008 BridgePointe Master Fund Ltd. $1,325,555.56 $17,674.07 $89,548.64 $1,432,778.27
Sep 2007 BridgePointe Master Fund Ltd. $1,881,984.78 $25,093.13 $127,138.53 $2,034,216.44
Sep 2007 Enable Growth Partners LP $2,300,208.56 $30,669.45 $155,391.87 $2,486,269.88
Sep 2007 Enable Opportunity Partners LP $404,331.99 $5,391.09 $27,314.87 $437,037.95
Sep 2007 Pierce Diversified Strategy Master Fund LLC, Ena $56,548.13 $753.98 $3,820.14 $61,122.25
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SCHEDULE "B"
Orig Date Holder Number of Warrants at Current Exercise Price Increase in Number of Warrants Total Number of Warrants after Increase
May 2008 BridgePointe Master Fund Ltd. 6,623,482 883,131 7,506,613
Sep 2007 BridgePointe Master Fund Ltd. 6,364,308 848,574 7,212,882
Sep 2007 Enable Growth Partners LP 11,628,913 1,550,522 13,179,435
Sep 2007 Enable Opportunity Partners LP 2,055,232 274,031 2,329,263
Sep 2007 Pierce Diversified Strategy Master Fund LLC, Ena 284,790 37,972 322,762
Entry into a Material Definitive Agreement
On September 17, 2009, CryoPort, Inc. (the “Registrant”) entered into an Amendment to Debentures and Warrants, Agreement and Waiver (the “Amendment”) with Enable Growth Partners LP (“EGP”), Enable Opportunity Partners LP (“EOP”), Pierce Diversified Strategy Master Fund LLC, Ena (“Pierce”), and BridgePointe Master Find Ltd (“BridgePointe”)(individually referred to as “Holder” and collectively as the “Holders”), who are the Holders the Company outstanding Original Issue Discount 8% Senior Secured Convertible Debentures dated September 27, 2007 and Original Issue Discount 8% Secured Convertible Debentures dated May 30, 2008 (collectively, the “Debentures”, and associated warrants to purchase common stock (the “Warrants”), as such Debentures and Warrants have been amended to date. The effective date of the Amendment is September 1, 2009. The purpose of the Amendment was to restructure the Company’s obligations under the outstanding Debentures in order to reduce the amount of the required monthly principal payment and temporarily defer the commencement of monthly principal payments (which was scheduled to commence September 1, 2009) and ceases the continuing interest payments for a period time.
The following is a summary of the material terms of the Amendment and is qualified in its entirety by reference to the Amendment, a copy of which is filed herewith as Exhibit 4.1.5 and incorporated herein by this reference:
1. The Company must obtain stockholder approval of an amendment to its Amended and Restated Articles of Incorporation to increase the number of authorized shares of its common stock to 250,000,000, and file such amendment with the Nevada Secretary of State, by December 31, 2009. If the Company fails to obtain stockholder approval and file such amendment by December 31, 2009, the Company will be in default under the Warrants which will trigger a Holder’s option to cause the Company to redeem all or a portion of a given outstanding Warrant by paying to the Holder an amount equal to the greater of (i) the Black-Scholes value of the amount of the Warrant being redeemed as of the date the Holder delivers the required default notice and (ii) the highest Black-Scholes value of the amount of the Warrant to be redeemed from the date of the notice of redemption through the trading day that the redemption amount is paid to the Holder. Any unpaid redemption amount due to a Holder will bear interest at the rate of 18% per annum.
2. The principal amount of each outstanding debenture is increased as of September 1, 2009, by an amount equal to all accrued and unpaid interest as of such date, plus all interest that would have accrued on the principal amount (as increased as of September 1, 2009, to reflect the then accrued but unpaid interest) from September 1, 2009, to July 1, 2010 (the maturity date of the Debentures). The Company shall have no obligation under the Debentures to make further payments of interest, and interest shall cease to accrue, during the period September 1, 2009 to July 1, 2010.
3. The conversion price of the Debentures was decreased from $0.51 per share to $0.45 per share.
4. The commencement of the Company’s obligation to make monthly payments of principal is deferred from September 1, 2009, to January 1, 2010, at which time the Company will make monthly pro rata payments to the Holders in the aggregate amount of $200,000 with a balloon payment due on the maturity date of July 1, 2010. Prior to the Amendment, the Company was obligated to repay the entire outstanding principal amount of the debentures in twelve equal monthly payments commencing on August 1, 2009.
5. The Holders’ existing right to maintain a fully diluted ownership equal to 31.5% has been increased by the Amendment to a fully diluted ownership of 34.5%.
6. The exercise price of the outstanding Warrants was decreased from $0.51 per share to $0.45 per share, which also resulted in a corresponding pro rata increase in the number of shares that may be purchased upon exercise of such Warrants as a result of the existing adjustment provision contained in each Warrant.
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7. The following additional covenants were added to the Debentures (replacing similar covenants which had terminated as of June 30, 2009) and shall remain in full force so long as any of the Debentures remain outstanding (the “Covenant Period”):
a. The Company shall maintain a total cash balance of no less than $100,000 at all times during the Covenant Period;
b. The Company shall have an average monthly operating cash burn of no more than $500,000 during the Covenant Period. Operating cash burn is defined by taking net income (or loss) and adding back all non-cash items, and excludes changes in assets, liabilities and financing activities;
c. The Company shall have a minimum current ratio of 0.5 to 1 at all times during the Covenant Period. This calculation is to be made by excluding the current portion of the convertible notes payable and accrued interest, and liability from derivative instruments from current liability for the current ratio;
d. Accounts payable shall not exceed $750,000 at any time during the Covenant Period;
e. Accrued salaries shall not exceed $350,000 at any time during the Covenant Period; and
f. The Company shall not make any revisions to the terms of the existing contractual agreements for the Notes Payable to Former Officer, Related Party Notes Payable and the Line of Credit (as each is referred to in the Company’s Form 10-Q for the period ended June 30, 2009); other than the previous amendment to the payment terms of a note payable to the Company’s former CEO.
8. The Company may not deliver a redemption notice with respect to the outstanding Debentures until such time as the closing price of the Company’s common stock shall have exceeded $0.70 (as adjusted for stock splits or similar transactions) for ten consecutive trading days prior to the delivery of the redemption notice.
The
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
4.1.5 Amendment to Debentures and Warrants, Agreement and Waiver dated September 17, 2009
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CRYOPORT, INC.
Date: September 22, 2009 By: /s/ Larry G. Stambaugh
Larry G. Stambaugh
Chief Executive Officer and Chairman
I definitely have not voted yet and I believe any stock holder can vote as late as the actual annual shareholders meeting. I anticipate voting "for" all of the proposals, unless of course we have heard nothing by October 9th. Here is a little breakdown of the proposals.
·Proposal 1: Election of Directors
·Proposal 2: Ratify Appointment of KMJ Corbin and Company
·Proposal 3: Approval to amend The Restated Articles of Incorporation to increase the number of Authorized Shares
·Proposal 4: Blank Check Preferred Shares
·Proposal 5: Approval of Reverse Stock Split of Company’s Common Stock at a ratio to be set by the board
·Proposal 6: Approval of 2009 Stock Incentive Plan
Proposal 1: Members up for re-election at the annual meeting, if elected will go to 2010
Carlton Johnson – Legal counsel for Roswell Capital Partners. His appointment to the board fulfills an agreement between the company and BridgePointe Master Fund
Adam Michelin- Serves as Chairman of the Audit Committee and as a member of the Corporate Governance Committee
Larry Stambaugh
Mr. Johnson and Mr. Michelin are considered the two “independents” that meet Nasdaq Marketplace requirements. Independents must not have been employed or compensated by CYRX in excess of $120,000 in the last three years.
Proposal 2: Independent accounting firm for at least the next fiscal year.
Proposal 3: For the amendment of articles to increase authorized common stock from 125,000 to 250,000. According to the proxy, to provide more flexibility to raise capital and/or as consideration in acquiring another business, for equity incentive plans, more options for growth strategies, discourage a takeover or change in control of the company
Proposal 4: Blank Check Preferred
The company’s article currently do not authorize the issuance of shares other than common stock. According to the proxy, they are proposing the approval of an amendment which creates 25,000,000 of preferred stock in an effort to provide flexibility when trying to raise capital to more appropriately meet the needs of both investors and issuing company. Also to prevent a change in control of the company by tender offer of other means.
Proposal 5: Dreaded Reverse Split
According to the proxy, the primary reason for the split is to increase the company’s stock price to a level that will enable it to apply for listing on the Nasdaq capital market to be more favorably viewed as an investment. It does not specify an exact ratio for the reverse split, but rather stipulates a range between one-for-two to one-for-fifteen. If the board implements, the ratio will be determined by the board.
Proposal 6: Stock Incentive Plan It’s set out pretty clear in the filing.
As always,
Cheers
and
GLTA
Well said Cryoport.
If CYRX starts to build their fundamentals, I don't see any reason to handcuff the companies ability to use available tools. Whatever the reason was for AIG to R/S or regardless of who owns it, it was a tool to achieve a goal (you can argue delisting or short squeeze) but thus far has achieved it's goal. Obviously noone would be a fan of a reverse split without change in the companies balance sheet, that goes without saying but Stambaugh probably has a reason to have the tool available. He has been in the leadership position of successful companies for over a decade, understands building fundamentals and I am willing to give him credit for it.
As far as blind faith in a CEO, well if you don't have a proven track record, I don't know what else you have. Tiger I would trust your analysis regarding the treasury market because you have a track record in that industry. I am not stating I will invest in Stambaugh and then not pay attention to my investment because he has been successful for the last 15 years in our industry, but at this time and what I've seen in the company over the last couple of years, I am willing to give hime some freedom on the reigns to get us where we want to be. At this time, I don't see any reason to go against the grain of the board of directors and the CEO.
My bad...just want to hear something already. It just feels like we are sooooooooo close, but who really knows.
GLTA
Easy Cport, its getting hot in here. I appreciate your insight. All I can offer is opinions and analysis from time to time, I do not have any inside access. I am in contact with Mr. Fine quite often he typically can offer insight but nothing that everybody else can't find out. Cash is definitely the biggest problem and has been for a while, nobody is stating otherwise. It really is not a big deal if Fedex says our name or not but IMO telling our name to world couldn't hurt our chances or getting cash.
As for the meeting, it should be very informative and nice to be there, but Stambaugh will do what he wants and I am sure he understands the implications of a reverse split and would not do so if it was not deemed appropriate. I truly don't think that he would reverse split without any business or revenues for an artificial price hike, I believe he just wants to have it as a tool. A split on a company showing revenue and growth should not have a huge impact on valuation considering what the future would hold for a company attracting large business in a very large industry. The shareholder meeting filing repeatedly states certain actions are being purused to be in compliance with nasdaq requirements. Whether we can get there or not is another question. I agree that a reverse split typically has negative implications but it does not have to be a death sentence (AIG) just an available tool.
GLTA
I was having trouble decifering your post but I think I understood the jist. We have been in negotiations with Fedex for a long time and have had press stating we have inital agreements set in place with Fedex, so it is no secret we are working with Fedex. I don't believe that using our name at the conference would be bad for anyone.
As far as having all our ducks in a row, so to speak, I couldn't agree more and that is why I have been all for Mr. Stambaugh. His methodology making everyone accountable and his understanding of corporate culture and what it takes to be successful is the only reason CRYX is in the position it is in right now.
Cryoport, if I may bother you for a second from your Cryoport pedistal. I never said they had to be there, it would be a waste of money. I was stating that we should probably be mentioned by Fedex since they are putting on a 2 hour presentation regarding global cold chain shipping and they are our partner in which our product is going to greatly increase their ability to penetrate this market.
Also, why would you reference the shareholders meeting in October as supposedly being there when it is set in stone. What were you really refering to?
Lol, I wouldn't advise it. Well we all knew about the shareholders meeting yesterday and what is going to be discussed...Old news?
I thought I saw you post something regarding a trade show comment but it does not seem to be there?
Sorry to waste your time with something that you have already posted, I vow never to speak of yesterday again...Since I am light years behind you, why don't you enlighten me to this October event that is important to CYRX.
Workshop E: It appears to be right up our alley. Actually, we should be mentioned in every one of these workshops, but...I can't imagine that we would not be mentioned by Fedex personnel.
http://www.coldchainpharma.com/preconf.php#workshop_a
Thanks for the update Sage...what happened to this?
"Larry seems to be working on internally preparing the company.... Rhetoric ( BS ) Contracts, shipments , REVENUE that's where the Beef is ....
Really no price action with 3 trading days left not a good sign ..... Hope I am totally wrong
GLTA
Sageman "
Was there no beef? There must still not be any signed dotted lines. Could you be provide some in-depth detail about what he said regarding financing and the other subjects mentioned above?
If not....no big deal.
Cheers
GLTA
Mr. Stambaugh is definitely trying to get the company in compliance of Nasdaq requirements as it is riddled throughout the initial proxy filed yesterday. It is for a reason regardless if CYRX is currently eligible to be listed, whether it is just to promote a better public image of CYRX management or an indication of things to come.
Electing "independent" directors, setting up committee's such as an audit committee and compensation and corporate governance committee are great steps to organize the company, promote accountability, create a credible public image and put the company in compliance with Nasdaq requirements. It makes you realize how in-over-their-heads the situation was for previous management. Over the last years we had billion dollar companies that understand corporate governance and the need for management control with committee’s already in place looking at our previous management thinking, yeah right this company is not ready. Now we have LS and…
I truly believe that LS understands what it takes for a company to be successful. I also believe that he recognizes the implications of performing a reverse stock split and would not do so if it were not prudent. I am not saying if he elects to pursue it, success is inevitable, I am just trying to give him the benefit of the doubt. Seeking the right to perform a reverse split sits uneasy for anyone and I hope that if voted in, it will remain only a right and not exercised.
Cheers
GLTA
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
A good deal of material to discuss wish I had more time right now, but the first thing I noticed was that it looks like we are headed for a stock split to attempt NASDAQ uplisting.
http://www.sec.gov/Archives/edgar/data/1124524/000101968709003196/cryoport_pre14a-100909.htm
Good Stuff Sir. Very good read.
Go CYRX
GLTA
I still believe that the dollar as a currency reserve is going to hold for a while. The U.S. bond market is far more liquid than any other market and our government as crooked as it is, is still generally more politically stable with respect to the alternatives, such as China. Also, if China were to pull it's money out, they would be the first ones to feel the pain so they can either take the enormous hit or keep buying.
There are just a few more days until the conference and I am getting anxious to see if we hear anything prior. What do you think, global deal? financing? will it come in the form of an equity issuance or debt instruments? We all know that we have plenty of debt and do not need anymore.
6 trading days before September 9th!
CYRX
Next Weeks Schedule
Monday
* Chicago Purchasing Managers Index
Tuesday
* ISM Manufacturing Index
* Construction Spending
* Pending Home Sales
* August Auto Sales
Wednesday
* Challenger Layoff Announcement Report
* ADP Employment Change Report
* Revised 2nd Qtr. Productivity/Unit Labor Costs
* Factory Orders
* Minutes of Aug. 11th-12th FOMC Meeting
Thursday
* Weekly Jobless Claims
* ISM Non-manufacturing Report
* August Chain Store Sales
Friday
* Employment Report
ISM and Employment could be some heavily watched figures for the markets.
Tiger, I would really like to read your analysis regarding the effects on the treasury market and it’s strength in the face of auctions totaling over a $100 billion and the Fed’s buy back program, as well as the performances of the markets.
Doghouse, Front Page TT = GAP Also read Where is the REAL Bank Risk
Big things coming for CYRX in the near future! The most important thing...Stambaugh's whole style. He is just to a T a CEO that is rolling this ball and he is not just getting it rolling, he is making it roll over anything.
Tiger, I read your new article. "Trading Places" is all time! I love that movie. Your analysis regarding the market is good. Besides the ugly glaring techinical indicators that will more than likely lead the equity market into a roll over, I believe the market is ready to cash in and take the ridiculous profits realized since March. The fundamental points are good as well, especially the last point regarding less leverage leading to less growth. It will be interesting how quickly businesses try and leverage up again and if it will be possible through today's busted (but somewhat recovering) credit markets.
Cheers
GLTA
Trey has updated report on www.thesmallcapinvestor.com on Cyrx. Meehan Capital Equity Update for CryoPort (OTCBB: CYRX) - New Price Target, Commentary on Cash Position, Updated Financial Targets
Not a huge release but the way it should be done. Just a simple update for shareholders and anyone following the company that they are working with a well known biopharm on a state of the art data logger (tracking a sustained temperature)with in a container that last 10+ days in which the user has been very satisfied with the results.
On top of that, a couple good statements by the head of operations and CEO. Again, not a huge release but very refreshing and helps to reassure that operations are moving along and people are actually working very hard in Lake Forest to get the company aligned and ready to implement the Express Shipper System into full commercialization.
Something I heard from Cryoport a long time ago but at the time did not work because there was nothing... "They are telling the story."
GAP I saw your updated photo and I look forward to the article. I am trying to work on another article but don't know that I will have time to finish one by the end of the week.
Cheers
GLTA
Larry Stambaugh is doing this thing right!!!!
http://finance.yahoo.com/news/CryoPort-Data-Logger-iw-1853490614.html?x=0&.v=1
TT, I look forward to reading any future articles that you submit, you typically offer good insight with respect to markets and the economy. I agree, Trey is one of the good guys with character. He basically pushed me to try and write articles, which is a new concept for me but I enjoy it. Did the first on Community Banks and he pushed me to do more so I'm trying to write and appreciate that he allows anyone to publish on www.thesmallcapinvestor.com Everyone submit!
GOOOOO CYRX.
GLTA
Stockdude my bet:
September 1,000