From the May 1st filing:
On March 24, 2008, China Shoe Holdings, Inc.’s (the “Company”) entered into an Equity Line Agreement (the (ELA”) and a Registration Rights Agreement (“RRA”) with Magellan Global Fund, L.P., a Delaware limited partnership with offices in San Diego, California (“Magellan”). The ELA provides that he Company will receive up to $2,000,000 from Magellan in connection with the issuance to Magellan of Common Stock. The Company is required to file a registration statement (the “Registration Statement”) relating to the sale common stock to be issued to Magellan in connection with the funding of the Company and for other shares as set forth herein. The ELA provides for the purchase of shares included in the Registration Statement to Magellan in tranches of up to $60,000 as requested by the Company no more often that once every two weeks during the two week period following the effective date of the Registration Statement. The shares to be purchased by Magellan will be priced at an 8% discount tot the market price for the Company’s common stock on the over the counter bulletin board (“OTCBB”) during the two week period preceding each purchase pursuant to a formula set forth in the ELA. The ELA provides that the purchases by Magellan there under shall be at a minimum price of $0.07 per share. At the time the ELA was executed, the market price for the Company’s common stock on the OTCBB was $0.10 per share. Magellan was issued 571,429 shares of the Company’s common stock upon execution of the ELA and will be issued additional shares of the Company’s common stock (having a market value of $40,000 based on the closing bid price on the effective date of the registration statement on such effective date.
The RRA also provides that the resale of the 571,429 shares and the $40,000 shares to be offered will be included in the Registration Statement. Since the ELA was entered into, the Company, in discussion with Magellan, has been able to eliminate the Placement Agent Agreement with GLB Trading Inc, a registered broker dealer (the “PAA”). Accordingly, the Company will not be required to pay any of the compensation required under the PAA, which is void, and of no further force and effect. As a result the Company is not issuing the 142,857 shares of the Company’s common stock contemplated under the PAA. The Company is required by the RRA to bear all of the costs of preparing the Registration Statement and affecting any necessary registrations under applicable state laws. The ELA provides that Magellan and its affiliates shall not engage in hedging or short selling activities during the period that the Company is seeking financing under the ELA and for 90 days thereafter. As a result of the elimination of the PAA, the ELA and RRA were amended to eliminate all references to the PAA.
