SunWorks Inc (SUNWQ)

[SandridgeEnergy]

Really interesting thanks for posting.

But is this for the prommissory note? I looked up the old 10-Q from the time period and found this:

WARRANTS

During the nine months ended September 30, 2012, the Company granted 16,817,144 stock purchase warrants associated with the issuance of 9,741,906 shares of common stock through a private placement at prices between $0.015 and $0.05.

...

This is the only promissory note that was listed:

During the period ended September 30, 2012, the Company entered into a securities purchase agreement dated September 19, 2012, providing for the issuance of the 8% Convertible Promissory Note (“Note”) in the principal amount of $42,500 with a maturity date of June 21, 2013. The note bears interest at the rate of 8% per annum from the date of issuance. The note can be converted into common stock at a variable conversion price. The variable conversion price is 58% multiplied by the market price, representing a 42% discount rate. The market price is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading days prior to the conversion date.

The email sounds like it is describing a simple discounted share, (perhaps in the form of a warrant with the right to buy at $.025 in six months). Furthermore the promissory note is obviously a superior deal compared with even the warrants as it allows the owner to obtain shares at any time for 40% below the market price. As usual, whoever is getting these notes has been able to buy shares at a massive discount to the market price whenever they want.

It's possible the entire company was funded by cycling these notes, which is what I think happened when SUNworks was purchased. An example of cycling would be to get a note that converts at a huge discount to market price, converting and selling the shares from the note, and then investing most of the proceeds back into the company in the form of a new note (which also converts at a massive discount).


The only thing this depends on is getting people to buy shares at any price, which is why offering shares at a discount to market (as the email you posted showed) makes sense. As long as you can get people to buy shares with their money, you win. The price doesn't matter because the number of shares you get is based on a discount to the price. The only thing that matters is getting someone to press "buy".

The only promissory note doesn't read like the outcome of the deal offered in the email.

Upon a little further digging, thanks to your very helpful email, I was able to find the document that appears to represent this offering:

http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8728387-1040-15584&type=sect&TabIndex=2&companyid=109162&ppu=%252fdefault.aspx%253fcik%253d1172631

It was filed under rule 506, more info on that here: https://www.sec.gov/answers/rule506.htm

While this is interesting, and I am glad you shared it, it's separate from the promissory notes (although it looks very similar on the surface). Perhaps there are more emails that describe those?

Buckylaw: Was this the offer you got or was it something else?