Look at the transaction from the perspective of the end result and ignore the steps...simply the result.. You tell me where the following is incorrect...either in amount, logic or calculation.
People should care about the reality.
Under the original transaction as described in the prospectus VERB issued $20.5 million in stock and $15 million went to SC for its stock. (We will ignore the $10 million restricted stock component since it is not affected in the transaction). That leaves VERB with $5.5 million. We will ignore the fees etc...and stick with the cash at that moment the acquistion closes.
So SC ends up with $15 millon in cash and only the restricted stock and Verb has $5.5 million left.
So far so good?
Ok now let’s look at the end result with SC buying $4 million in OFFERING stock with the $15 million they got.
1) VERB issued $20.5 million worth of stock. That doesn’t change. (We will ignore the overallotment as it doesn’t enter into this...Verb will see whatever cash comes from that regardless). Agree?
2) SC ends up with $11 million in cash and $4 million in offering stock. Agree?
3) Ok....so if Verb issued $20.5 million of offering stock and $4 million worth of that stock went to SC then that means VERB sold $16.5 million elsewhere..and got $16.5 million for it. Correct?
4) And of the $16.5 million, $11 million ends up with SC. Correct?
Of course it’s correct...SC now has $11 million in cash and $4 million worth of offering stock. That is the end result nobody disputes.
So what does Verb have left?
$16.5 million (#3) minus the $11 million in cash SC got (#4) EQUALS $5.5 million EXACTLY the same number.
He is playing a numbers game to make it seem like they have more cash after doing the $4 million offering stock purchase by SC using offering cash.
They don’t....but some may be falling for the math game he is playing.
"Harsh reality is always better than false hope"
