Bourne,
Trying to reconcile the "People's Offering" as I will now call it to the Backstop provision in Friday's 8K.
Friday's filing obligates the Holders to purchase shares of the backstop offering--underlined below--so perhaps there is a second registration coming?
Backstop
As a condition of closing, each Holder shall be required to enter into the backstop commitment and will be obligated to fund their pro rata portion of the backstop commitment, which provides up to a $50,000,000 backstop for a rights offering possibly contemplated by the Company.
However, this Current Report on Form 8-K is not an offer to purchase or sell rights, and the Company will not make such an offer unless and until there is an effective registration statement covering such a transaction and there are no assurances as to when the Commission will declare such a registration statement effective (I assumed today's filing was related to the backstop commitment).
The purchasers will have the opportunity to purchase, at the purchase price of the rights offering and subject to the terms and conditions set forth in this agreement, shares of Common Stock that are not issued in the rights offering pursuant to the stockholders’ exercise of their basic subscription rights and over-subscription rights.
Within two (2) business days following the satisfaction of the closing conditions as set forth in the agreement, and each successive fifteen (15) Business Day period commencing with the commencement date during the term of this agreement, the purchaser shall purchase from the Company in the backstop offering up to the number of purchase shares (as defined below) equal to the lesser of (i) One Million Dollars ($1,000,000) worth of purchase shares or (ii) 20% of the dollar trading volume of the Common Stock on the Principal Market on the five (5) Business Days immediately preceding the purchase date (each such purchase, a “purchase” and such shares, “purchase shares”) at the purchase price on the purchase date. The purchase amount may be increased on a case-by-case basis as reasonably requested by the Company. With respect to each such purchase, the Company must deliver the purchase shares on the business day following the purchase date.
This back stop agreement shall continue until a maturity date to be set by the Company’s board of directors and/or upon other events including if the rights offering is not consummated by December 31, 2018 or upon a breach of the agreement.
