Innovation Pharmaceuticals Inc (IPIX)

[olden_grumpini]

The agreement anticipates the possibility that the authorized unissued shares will be less than the required minimum:

(b) If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum on such date, the Company shall use commercially reasonable best efforts to hold a special meeting of shareholders (which may also be at the annual meeting of shareholders) or take action by written consent of shareholders at the earliest practicable date to obtain shareholder approval to amend the Company’s articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum. The Company shall use its commercially best efforts to obtain such shareholder approval to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at the earliest possible date, but in no event later than 75 days following the date of on which number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum. . . .

The Aspire deal is clearly on hold. Even if there was a legal loophole I don't think IPIX would attempt to use it since the penalties are so large:

(d) If the Company enters into or effects a Variable Rate Transaction in violation of the prohibition set forth in Section 4.14(b) herein, the Company shall pay to each Purchaser, in cash, as liquidated damages and not as a penalty, an amount equal to 25% of the sum of (a) the aggregate Stated Value of the shares of Preferred Stock then held by such Purchaser plus (b) the aggregate Stated Value of the shares of Preferred Stock issuable upon exercise of the Warrants then held by such Purchaser. For purposes of clarity, the Company shall pay the liquidated damages described herein for each Variable Rate Transaction that violates the prohibition set forth in Section 4.14(b) herein. The Company shall pay to each Purchaser such amount of liquidated damages in cash by wire transfer within three (3) Trading Days of the date of such Variable Rate Transaction. . . .

In an interesting twist, IPIX paid the purchaser $35,000 for their legal fees and expenses on closing of the deal.

There is a dividend due on January 1. This dividend can be paid in cash or preferred shares.