MS: Some of your ramblings flew over my head, too, but this much we know. Assuming execution of private placement, Lynch paid $615,000 cash for 30% of RSHN (1.59 billion shs, by my reckoning). Lynch also committed $2.4 MM toward inventory expenses.
From News Release:
"This signed agreement gives RushNet, Inc. a cash infusion of $615 thousand plus an additional commitment for inventory capital of $2.4 million, for a total of over $3 million dollars to RushNet, Inc."
RE: "but how in the world did Bob ever think that if Lynch is giving x amount of dollars to the public company that Bob would NOT be questioned for the NEW massive shares he is getting without a dollar amount placed towards the public company by him"
This is the nub of your argument, as I read it. Lynch gave $615,000 cash + $2.4 MM commitment to strike a deal that raised Lynch's stake in RSHN from 0% to 30% (1.59 billion). Meanwhile, as structured within the same transaction, Corr received 977 million additional shares gratis to raise his stake to 1.696 billion (32% of new O/S) from 719 million (35% of old O/S).
I can only surmise that Corr has, written into his contract, a minimum percent ownership clause. If the O/S is expanded, Corr receives free shares to maintain his percentage. By the way, Corr isn't CEO. He is President. Who is CEO?
RushNet Accepts New Deal...A private placement agreement has been signed
Friday April 28, 1:01 pm ET
BLUE ISLAND, Ill.--(BUSINESS WIRE)--April 28, 2006--Robert Corr, President of RushNet, Inc. (Pink Sheets:RSHN - News) has agreed today to accept the offer made by Michael Lynch of Lynch Partners One, LLC to purchase a 30% stake in the company's stock in the form of restricted shares. This signed agreement gives RushNet, Inc. a cash infusion of $615 thousand plus an additional commitment for inventory capital of $2.4 million, for a total of over $3 million dollars to RushNet, Inc.
Robert Corr and the management team of RushNet Inc. will hold restricted shares totaling 32%, with the public free trading shares totaling 38% of the stock. The stock issued to Lynch has been placed into an escrow account with a closing scheduled in about two weeks.
As, Robert Corr stated: "This new round on capital will secure the company's need for inventory for all the new items planned for introduction this summer. Our larger retailers require firm inventory levels to be maintained at all times. As a company, we have gained a valuable partner who has expertise in raising large amounts of capital to assist us in our future expansion plans. I feel confident that, Michael Lynch and I have developed a strategic plan to grow RushNet's brands on a worldwide scope."
Michael Lynch and Robert Corr as mentioned in a previous press release, are in the process of purchasing a regional brewery that will use Rush Net Inc. to market the brands worldwide. The newly designed products will be introduced this summer and the new labels will be unveiled in the next few weeks to the stockholders.
Michael Lynch was quoted, "This will be the beginning of a highly visible beverage company, and I'm looking forward to launching some our branded beverages in the national beverage arena."
RushNet Inc. is the licensed marketing agent for Rush Beverage Company products and brand owner of e-water(TM). www.enjoytherush.com
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