New document posted on Pink Sheets today. But when I looked, it was same report as filed in December.
But I communicated with their lawyer at Procopio law firm, he sent me this document, which as far as I can tell, was not posted. This is what should have been posted, I think:
(Sorry to cut and paste, but don't know how to post the document otherwise)
AERIUS INTERNATIONAL, INC.
CURRENT REPORT
December 30, 2010
Item 1. Entry into a Material Definitive Agreement.
On December 28, 2010, Aerius International, Inc., a Nevada corporation (the “Company” or “we”), entered into a Reserve Equity Financing Agreement ("REF") with AGS Capital Group, LLC ("AGS"), pursuant to which AGS committed to purchase, from time to time over a period of three years, shares of our common stock for cash consideration up to $3,000,000 (the “Commitment Amount”), subject to certain conditions and limitations. In connection with the REF, we also entered into a Registration Rights Agreement with AGS, dated December 28, 2010.
The following summary of the REF and the Registration Rights Agreement is not complete, and is qualified in its entirety by reference to the full text of those agreements, each of which are attached as an exhibit to this Current Report. Readers should review those agreements for a complete understanding of the terms and conditions associated with this financing. The provisions of the REF and registration rights agreement, including without limitation the representations and warranties contained therein, are not intended as documents for investors and the public to obtain factual information about the current state of affairs of the parties to those documents and agreements. Rather, investors and the public should look to other disclosures contained in the Company's reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Reserve Equity Financing Agreement
For a period of 36 months from the effectiveness of a registration statement filed pursuant to the registration rights agreement (the "Registration Statement"), we may, from time to time, at our discretion, and subject to certain conditions that we must satisfy, draw down funds under the REF by selling shares of our common stock to AGS. The purchase price of these shares will be 90% of the closing bid price of the Company’s Common Stock during the five consecutive trading days after we give AGS a notice of an advance of funds (an "Advance") under the REF (the "Pricing Period"). The amount of an Advance will automatically be reduced by 50% if on any day during the Pricing Period, the bid price for that day does not meet or exceed 98% of the average closing price of the Company’s Common Stock for the ten trading days prior to the notice of Advance (the "Floor Price"). The REF does not prohibit the Company from raising additional debt or equity financings, other than financings similar to the REF.
In addition, before AGS is obligated to buy any shares of our Common Stock pursuant to a notice of Advance, certain conditions, among others as more particularly set forth in the REF and the Registration Rights Agreement, and none of which is in AGS's control, must be met:
? The Company shall have filed with the SEC a Registration Statement with respect to the resale of the shares of Common Stock issued to AGS in accordance with and subject to the terms of the Registration Rights Agreement, and such Registration Statement shall have previously become effective and remain effective.
? The Company shall have obtained all permits and qualifications required by any applicable state in accordance with the Registration Rights Agreement for the offer and sale of the shares of Common Stock, or shall have the availability of exemptions therefrom. The sale and issuance of the shares of Common Stock shall be legally permitted by all laws and regulations to which the Company is subject.
? There shall not be any fundamental changes to the information set forth in the Registration Statement which are not already reflected in a post-effective amendment to the Registration Statement.
? The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the REF agreement and the Registration Rights Agreement to be performed, satisfied or complied with by the Company.
? No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of or which would materially modify or delay any of the transactions contemplated by the REF agreement, and no proceeding shall have been commenced that may have the effect of prohibiting the consummation of or materially modify or delay any of the transactions contemplated by the REF Agreement.
? The amount of an Advance shall not exceed the Commitment Amount. In no event shall the number of shares issuable to AGS pursuant to an Advance cause the aggregate number of shares of common stock beneficially owned by AGS and its affiliates to exceed 4.99% of the then outstanding shares of common stock of the Company ("Ownership Limitation"). Any portion of an Advance that would cause AGS exceed the Ownership Limitation shall automatically be withdrawn. For the purposes of this provision, beneficial ownership is calculated in accordance with Section 13(d) of the Exchange Act.
There is no guarantee that we will be able to meet the foregoing conditions or any other conditions under the REF or that we will be able to draw down any portion of the amounts available under the REF.
There is no contractual limit to the number of shares that we may be required to issue to obtain funds from the REF as it is dependent upon our share price, which varies from day to day. If we draw down amounts under the REF when our share price is decreasing, we will need to issue more shares to raise the same amount than if our stock price was higher. This could cause downward pressure on the price of our Common Stock.
Under the REF, the Company has issued and intends to register approximately 16,666,666 shares of Common Stock in consideration of the fees and expenses of AGS (the “Commitment Shares”). The entire share requirement for the full $3,000,000 would be approximately 300,000,000 based on current market prices. However, the Company currently has decided to limit itself to $100,000 to $150,000 as the Advance under the REF, or 10,000,000 to 15,000,000 shares based on current market prices. If the Company's share price rises, the Company will consider drawing down in excess of $100,000 to $150,000. In order to seek an Advance under the REF, the Company will need to increase its authorized number of shares of Common Stock.
The REF contains representations and warranties of the Company and AGS which are typical for transactions of this type. AGS agreed that during the term of the REF, neither AGS nor any of its affiliates, nor any entity managed or controlled by it, will, or cause or assist any person to, enter into or execute any short sale of any shares of our Common Stock. The REF also contains a variety of covenants on the part of the Company which are typical for transactions of this type, as well as the obligation, without the prior written consent of AGS, not to enter into any other equity line of credit agreement with a third party during the term of the REF.
The REF obligates the Company to indemnify AGS for certain losses resulting from a misrepresentation or breach of any representation or warranty made by the Company or breach of any obligation of the Company. AGS also indemnifies the Company for similar matters.
The Company paid no fees, and is not obligated to pay any fees in the future, in connection with the REF, other than the Commitment Shares, which have been issued as of the date hereof.
Item 8. Sales of Equity Securities.
The information set forth under Item 1 of this Current Report is hereby incorporated by reference into this Item 8.
Item 10. Changes in Issuer’s Certifying Accountant.
In connection with the REF, the Company is obligated to use the accounting and audit services of Frideman LLP to ensure compliance with applicable accounting requirements and the published rules and regulations of the Securities and Exchange Commission.
Exhibits
1 Reserve Equity Financing Agreement, dated December 28, 2010, by and between AGS Capital Group, LLC and Aerius International, Inc.
2 Registration Rights Agreement, dated December 28, 2010, by and between AGS Capital Group, LLC and Aerius International, Inc.
AI
