Another great job by Leo. He was able to get a better deal from Aspire than the last time too. When you look at the detail of the 8k from last time and the 8k this time there are some differences. First, the last time Leo had to pony up 336,625 shares as a commitment fee, a freebie for Aspire. This time there is a commitment fee of 210,523 shares for twice the amount of capital. Last time, Leo also had to sell 112,208 shares right off the bat to Aspire for $100,000. I do not see any such provision in the 8k for the new agreement. See below -
...dated as of October 25,2013 (the “Purchase Agreement” ), entered into by and between the Company and Aspire Capital Fund, LLC (the“Buyer” ) pursuant to which the Company has agreed to issue to the Buyer shares of the Company’s Class A Common
Stock, par value $0.0001 per share (the “Common Stock” ), in an amount up to Twenty Million Dollars ($20,000,000)
(the “Purchase Shares” ), in accordance with the terms of the Purchase Agreement. In connection with the
transactions contemplated by the Purchase Agreement, the Company has registered with the U.S. Securities and
Exchange Commission (the “ SEC ”) the sale by the Buyer of following shares of Common Stock:
(2) 210,523 shares of Common Stock which have been issued to the Buyer as a commitment fee (the“Commitment Shares” ).
It would seem that maximum dilution under the new agreement is about 13.8 million shares per the following excerpt from the new 8k:
(1) up to 13,789,477 shares of Common Stock with an aggregate value of up to $20,000,000 to be issued upon
purchase from the Company by the Buyer from time to time (the “Purchase Shares.” ).
Also, there has been a lot of speculation about who has been selling. The language from the first agreement says the agreement is terminated when Aspire has sold all of their shares by a variety of means enumerated below:
· ordinary brokers’ transactions;
· transactions involving cross or block trades;
· through brokers, dealers, or underwriters who may act solely as agents;
· “at the market” into an existing market for the common stock;
· in other ways not involving market makers or established business markets, including direct sales to
purchasers or sales effected through agents;
· in privately negotiated transactions; or
· any combination of the foregoing.
The real key to who has been selling is in the following quote from schedule B accompanying the first 8K:
This offering as it relates to Aspire Capital will terminate on the date that all shares offered by this prospectus have
been sold by Aspire Capital.
In today's PR Leo specifically states that the prior agreement with Aspire was terminated per the terms of the agreement. Which would seem to indicate Aspire has now sold all of the shares from the first agreement to brokers, underwriters etc. I think this is the smoking gun as to who has been selling.
By the way the current agreement contains the exact same language.
