Elah Holdings Inc fka RELYQ (ELLH)

[Enterprising Investor]

The Rights Offering

Subsequent to the closing of this offering, we expect to conduct a rights offering, whereby we will issue, at no charge, to the holder of each share of our common stock that is outstanding as of a date to be determined (the “Rights Offering Record Date”), including holders of the shares of common stock purchased in this offering, one right to purchase such number of shares of our common stock at a price described below. The Rights Offering Record Date will be set at a date after, and will not be determined until after, the closing (or termination) of this offering. We currently anticipate that the rights will not be transferable separately from the underlying shares of our common stock and that transfer of ownership of a share of our common stock after the Rights Offering Record Date but prior to the exercise of the unexpired right with respect to such share would also transfer ownership of the unexercised and unexpired right issued with respect to such share. We expect that the closing of the Rights Offering will be concurrent with, and contingent upon, the closing of the GRSA Acquisition. We expect to seek to raise $150 million in net proceeds in the Rights Offering, less the net proceeds received by the Company in this offering and less the net proceeds received from the October 2014 Private Placement. If the Rights Offering is fully subscribed, we would receive more than $125 million in aggregate net proceeds from this offering and the Rights Offering, and intend to use such excess for general corporate purposes, which could include additional investments in GRSA. We currently expect the Rights Offering to include an “over-subscription privilege,” which will provide a shareholder who fully exercises their rights to subscribe for an additional number of shares to be determined. The “over-subscription privilege” is subject to allotment, and shares will be distributed on a pro rata basis if allotment does not exist to fulfill all requests.

Under the Backstop Commitment Letter, we have agreed that the price per share of common stock to be purchased in the Rights Offering will be the lesser of (i) $7.50 per share or (ii) a 25% discount to the 10-day volume weighted average price of our common stock prior to the commencement of the Rights Offering, but in no event greater than the offering price hereunder. For example, assuming we were to raise $150 million in net proceeds in the Rights Offering, less the net proceeds received by the Company in this offering (assuming an offering price of $9.93 per share, the closing price of our common stock on November 13, 2014, and no exercise of the underwriters’ option to purchase 555,000 additional shares) and less the net proceeds of the $3 million October 2014 Private Placement, if the Rights Offering Record Date were November 14, 2014, our 10-day volume weighted average price of our common stock would be $10.00, the price per share in the Rights Offering would be $7.50 and the holder of each share of our common stock would receive the right to purchase 0.97 shares of our common stock in the Rights Offering. We do not intend to issue fractional shares as a result of the exercise of rights in the Rights Offering and therefore may elect to round any fractional shares as a result of the exercise up to the next whole share number. In the Rights Offering, all holders of our common stock will be entitled to purchase such number of shares of our common stock equal to the total amount sought to be raised in the Rights Offering divided by the price per share in the Rights Offering, subject to certain limitations relating to preservation of our NOLs.

My kind of deal!