California Grapes International, Inc (CAGR)

[Dragon5]

In the case of the private placement with GDHI, stock was sold to a group for $960,000 back in February-When the stock was trading at .004 in the market these shares were sold to a private investor for .0006, dirt cheap-Normally in private placements when companies need to raise money shares are sold or placed at a discount to the market price, but usually not at such a discount as this-That angered DH and some others-With most private placements there are no restrictions on the buyer selling the stock, for instance having to wait for a certain time period-That is why stocks decline when news is made public to decline to the secondary or private placement price-But the interesting thing here was this group also in addition to stock received warrants exercisable at .025 a share-When I asked Frank at the last conference call did this group sell or hold onto their shares he said they are holding onto their shares believing in the long term of the company-
Restrictions can be put in private placement deals but most companies when raising money this way do not have the bargaining leverage to do that-