Ocata Therapeutics Inc fka OCAT

[rocky301]

Spetty,

All I know is that the 8k filed says that they're issuing 240.5 million shares in conjunction with the global settlement. The number from the post Ison referenced was 50 million higher than what the PR and the 8k said. I guess the obvious question is where are the other 50 million shares coming from and to whom are they being issued?

Below is where the 50MM+ shares come in.(see highlighted section below)
The 21MM+ shares are PENALTY shares the 30MM+ are the balance we owe
per settlement as only 36MM were issued. Total, 51MM+ need to be issued when we have the shares. Here is the share breakdown I posted,
http://investorstemcell.com/forum/rockys-corner/6456-49.htm#post52181


Midsummer Investment, Ltd
On August 9, 2011, the Company entered into a Settlement Agreement and Mutual Release (“Settlement Agreement”) with Midsummer Investment, Ltd and Midsummer Small Cap Master, Ltd. (collectively, “Midsummer”). Pursuant to the Settlement Agreement, upon tender by Midsummer to the Company of warrants held by Midsummer to purchase a total of 20,319,731 shares of the Company’s common stock (the “Warrants”), and duly executed notices of exercise (deemed to occur upon execution of the Settlement Agreement), the Company, to settle errors involving warrant issuances to Midsummer, agreed to (i) deliver to Midsummer an aggregate of 36,000,000 shares of the Company’s common stock (the “Current Shares”), as an exercise of the Warrants in respect of a partial exercise of Warrants, (ii) undertake to issue 30,585,774 additional shares of the Company’s common stock (the “Future Shares”), as an exercise of the remainder of the Warrants within ten days of the date that the Company shall have sufficient authorized and unissued shares of Common Stock (“Authorized Share Increase”) which are not otherwise reserved for issuance for other purposes to enable the Company to issue all of the Future Shares and (iii) issue 3,058,577 shares of the Company’s common stock (the “Additional Future Shares”) for every calendar month elapsed between the date of delivery of the Current Shares and the date following delivery of the Future Shares. The Company and Midsummer provided mutual general releases.

The Company calculated the fair value of the warrants on August 9, 2011 using the stock price on that date, the exercise price per the warrant agreement, an expected term based on the expiration date of the warrant, volatility of 165%, and a discount rate of 0.33%. Based on these assumptions the fair value of the warrants to purchase 20,319,730 shares of common stock was $3,039,090 which represents a $409,082 decrease in fair value from June 30, 2011. The decrease of $409,082 is recorded in the consolidated statement of operations as “adjustments to fair value of derivatives.”

The shares to be issued were valued at $0.17 which is the share price on the date of the agreement. Per the Settlement Agreement, the Company is to issue 36,000,000 shares immediately, 30,585,774 Future Shares and 3,058,577 for each calendar month that the Future Shares of 30,585,774 are not issued.

As of September 30, 2011, the Future Shares of 30,585,774 were not issued and the Company does not believe that the Future Shares will be issued until March 2012. As such, the Company estimated that approximately 21,410,000 Additional Future Shares will need to be issued at that future date.

The Company estimated the required liability at September 30, 2011 to be $8,839,288 based on 30,585,774 Future Shares and 21,410,039 Additional Future Shares valued at $0.17 per share of common stock which is recorded as “accrued settlement” on the accompanying consolidated balance sheets. The Company recorded $11,920,198 as “finance costs” in the consolidated statements of operations related to the 36,000,000 Initial shares, the 30,585,774 Future Shares, the 21,410,039 Additional Future Shares, offset by the $3,039,090 fair value of the warrant derivative liability.