More s1 goddies for those who don’t take the time to read filings
Our existing stockholders may experience significant dilution from the sale of our common stock pursuant to the Financing Agreement.
The sale of our common stock to PAG Group, LLC in accordance with the Financing Agreement may have a dilutive impact on our stockholders. As a result, the market price of our common stock could decline. In addition, the lower our stock price is at the time we exercise our put options, the more shares of our common stock we will have to issue to PAG in order to exercise a put under the Financing Agreement. If our stock price decreases, then our existing stockholders would experience greater dilution for any given dollar amount raised through the offering.
The perceived risk of dilution may cause our stockholders to sell their shares, which may cause a decline in the price of our common stock. Moreover, the perceived risk of dilution and the resulting downward pressure on our stock price could encourage investors to engage in short sales of our common stock. By increasing the number of shares offered for sale, material amounts of short selling could further contribute to progressive price declines in our common stock.
PAG Group, LLC will pay less than the then-prevailing market price of our common stock, which could cause the price of our common stock to decline.
Our common stock to be issued under the Financing Agreement will be purchased at a ten percent (10%) discount, or ninety percent (90%) of the lowest closing price for our common stock during the ten (10) consecutive trading days immediately preceding the date on which we issue a Put Notice to PAG (as provided for in the Financing Agreement).
PAG has a financial incentive to sell our shares immediately upon receiving them to realize the profit between the discounted price and the market price. If PAG sells our shares, the price of our common stock may decrease. If our stock price decreases, PAG may have further incentive to sell such shares. Accordingly, the discounted sales price in the Financing Agreement may cause the price of our common stock to decline.
We may not have access to the full amount under the Financing Agreement.
The lowest closing price of our common stock during the ten (10) consecutive trading day period immediately preceding the filing of this Registration Statement was approximately $0.26. At that price we would be able to sell shares to PAG under the Financing Agreement at the discounted price of $0.234. At that discounted price, the 4,046,995 shares would only represent $946,997, which is far below the full amount of the Financing Agreement.
