Umbra Applied Technologies Group Inc (UATG)

[Gordo56]

A 3a10 is in fact a way to pay debt however you are incorrect when you say that you can not use it for acquisition. It strikes me as odd that you would take a hard line position on this. When you buy a company is that not a debt? In fact, this is and has been done on higher trading companies when they are creating security for consideration through traditional investment/lending firms. Many acquisition contracts have a schedule of consideration to be paid over a period of time which is exactly where a 3a10 can be used.

The SEC is not going to itemize all the circumstances in which you could potentially use this mechanism because just like any other law/regulation it is intentionally left up to interpretation so that it may be used legally in circumstances that may not have been foreseen. Reading a definition on google can not be the end all of ones DD.

Regardless, the circumstances in which UATG used this were in fact not for acquisition as clearly outlined in the court documents. UATG used this to clear debt. That is the interesting part because it raises the question why are they clearing all their debt out and not raising the authorized at the end of the year? Its not for cash raise obviously. IMO they are clearing to be unencumbered for an acquisition or merger most likely next year.

One last thing, once again false conclusions, statements or assumptions are made when those who are not thorough state that the company was sued. That is not correct. It was a mutual agreement to settle debt hence the 3a10