The first $100,000 tranche was already done on January 20. In effect, given the 50% price premium, the deal amounted to a private equity placement of 4,278,990 shares. The shares are restricted, thus will be held for at least six months. TAUG received a much needed cash influx of $100,000.
For those that might be curious, these comments are based upon real facts as derived from reading each of the 48 pages associated with the 8-K that was filed on Friday (01/23/2015). Stella Sung can make public comments, but the comments are "filtered" by Stella's "packaging" (sorry!). There are two basic parts to the settlement between TAUG and Typenex. There is a Share Purchase Agreement, which provides the details of the three (3) $100,000 tranches (see above), and a Settlement Agreement, which provides the details of TAUG's $600,000 payment to Typenex. Both documents were attached to the 8-K. The tranches are to occur as specific conditions of the Settlement Agreement are executed. Based upon the fact the shares being delivered to Typenex are essentially being "back-dated" to July 26, 2014, as if a warrant were executed on that date, there will likely be immediate pressure on the TAUG share price. TAUG's Transfer Agent is being instructed to deliver shares to Typenex "without the restrictive legend". The Settlement Agreement does limit the number of shares that can be sold during any single week. As an example, if Typenex were to sell shares next week (not that Typenex will sell anything next week) the limit, using last week's weighted-average selling price (VWAP), would be an approximate total of a million shares to be sold for the period 01/26 thru 01/30. This is equivalent to a limit of $15,000 in share value per week. The number of shares traded could be higher, based upon a higher weekly average trading volume. Given the conditions spelled out in the Agreement, it is pretty safe to conclude the $15,000 limit (not higher) will probably be the weekly norm for the foreseeable future.
There is nothing to be gained debating the need for or conditions of the settlement. It is done! Over several months TAUG will be receiving some much needed cash, i.e. $100,000 on 1/20/2014 + $200,000 more as the conditions of the settlement evolve. Frankly, there is no other way to "package" the deal...TAUG's shareholders will see more pressure on the share price! Basically, $600,000 worth of newly issued TAUG shares will enter the market throughout 2015. And this does not consider any impact from the shares Typenex is buying with the $100,000 tranches. Simply, TAUG is paying "debt" via stock distributions, which is by definition, "dilutive."
