Each one in plain English, with the numbers worked through for a shareholder.
21 Mar 2014capital raising announcement● NeutralMajor
In March 2014 the company sold more Series A preferred stock units to 15 investors, with listed sales of $1,500,000 on March 13 and smaller amounts on March 18 to 21, about $2.14 million in total. The units carry the same $0.45 and $0.70 warrants as before. This continues the Series A fundraising, and the amount raised in this filing is much larger than earlier batches. Because the issuances add preferred stock with priority over common, existing common holders are further subordinated and diluted (inference).
Between January 31 and March 5, 2014 the company sold four more batches of Series A preferred stock units to four individuals, totalling $450,000 (321,429 units). Each unit includes a preferred share and warrants at $0.45 and $0.70 per common share; a placement agent is owed a $45,000 commission plus 128,572 warrants at $0.35. The board also raised the authorised Series A shares from 3,250,000 to 4,750,000. The filing states that Series A has priority over common stock on dividends and in liquidation, which limits what common holders could receive.
16 Oct 2013capital raising announcement● NeutralMajor
Effective September 30, 2013, the company cancelled the 5% convertible note (original $1,446,551, outstanding balance $1,514,516.48), now held by Hidden Peak Partners LC, in exchange for a 10-year warrant for 3,260,000 shares at $0.01. It also cancelled $1,049,349.54 of salary owed to CEO William C. Gibbs in exchange for a 10-year warrant for 2,260,000 shares at $0.01. This resolves the GRR convertible note and the accrued salary as debts, but the new warrants could add shares if exercised, which would dilute existing holders (inference). The attached form of warrant in the exhibit shows 3,030,000 shares, which differs from the 3,260,000 in the agreement text.
On August 20, 2013 the company borrowed $53,000 from Bleeding Rock, LLC, an entity managed by CEO William C. Gibbs, on a 6% convertible note. The 8-K text gives the due date as August 31, 2014, while the note itself says June 30, 2014. The note converts into stock if the company completes a financing of $2,000,000 or more, at the same price as that financing. This is a small new loan from a related party, following the earlier Bleeding Rock-linked note.
3 Feb 2012capital raising announcement● NeutralMajor
The company completed a private offering of 10% convertible notes totalling $1,515,000, convertible into 3,030,000 shares, plus warrants for 3,038,667 shares at $0.50 through April 30, 2014. The notes are due April 30, 2014 and would add shares if converted or exercised, which dilutes existing holders. The terms reflect a one-for-two reverse stock split effective October 19, 2011.
