Each one in plain English, with the numbers worked through for a shareholder.
19 Oct 2009capital raising announcement● NeutralMajor
Between October 13 and 15, 2009 the company sold 196,154 shares for $51,000 in total, with warrants on 39,231 more shares at $0.31, for general working capital. Effective October 19, 2009 it renamed itself TN-K Energy Group Inc. through a short-form merger approved by the board without a shareholder vote, with a new CUSIP number and a new trading symbol still to be assigned. This explains the name that earlier filings used without explanation. The new shares and warrants dilute existing holders.
On July 31, 2007 Laurus again eased the payment terms, now allowing the remaining $100,000 to be paid as $25,000 on each of August 1, September 1, October 1 and November 1, 2007. Separately, the company agreed to issue 358,000 unregistered shares at $0.50 to Andy Teng, described as its former Chairman and CEO, to settle $179,000 of unpaid salary, expenses and loans. This swaps debt for new shares, which dilutes existing holders. It differs from the September 2005 plan to swap about $1 million owed to Teng for shares at $1.00.
On April 23, 2007 the company agreed with Laurus to settle the remaining $2.1 million of debt for $200,000 cash ($50,000 immediately, $150,000 by August 1, 2007) plus a warrant for 1,000,000 shares at $0.40, and cut the exercise price of Laurus's earlier warrant from $0.44 to $0.40. This resolves the debt that was accelerated in May 2005 and replaces the Protron-linked terms from December 2005. The company also raised $250,000 from one investor via a 7.5% note convertible at $0.35, due April 23, 2008, with warrants on 20% of the conversion shares at $0.25, which could dilute shareholders. Its office moved to Crossville, Tennessee, in space controlled by its CEO at no charge. The filing is signed by L.E. Smith as Chairman and CEO, not Andy Teng.
14 Dec 2005capital raising announcement▲ GoodMajor
On December 8, 2005 the company agreed terms with Laurus, its largest secured creditor: interest-only payments at prime plus 2% until the Protron merger, which it expects in February 2006. On completion it would pay Laurus 50% in cash, about $950,000, and expects to issue common stock for the balance at the 30-day average trading price before the merger, with registration rights. Laurus also released accounts receivable funds held in a lock box. This builds on the May 2005 default and acceleration and ties the debt settlement to the Protron merger.
On October 28, 2005 the company raised another $50,000 from one investor through a 7% note convertible at $0.25 and due October 28, 2006, with warrants on 20% of conversion shares at $0.25. This continues the up-to-$1,000,000 round started in September 2005 on similar terms and could dilute shareholders if converted.
On September 29, 2005 the company received $250,000 from one investor through a 7% note convertible at $0.25, with warrants on 20% of the conversion shares at $0.25; the investor committed another $250,000 if milestones are met. The board had authorized up to $1,000,000 of such financing. Separately, CEO Andy Teng agreed to exchange about $1 million he is owed for 1,000,000 restricted shares at $1.00, which the filing says is well above the current market price, and to release his claims. The note conversion and warrants could dilute existing shareholders.
Digital Lifestyles gave Alloy Marketing and Promotions a roughly $600,000 unsecured note, repayable on demand, in payment for Alloy's 2004 services; Alloy can convert it to stock at 75% of market value. The company also said it had about $120,000 in cash as of March 23, 2005, is seeking $15-20 million of new financing (it says $20 million is the minimum it needs), has no agreement with investors, and warned it may have to cut operations, sell assets, cease business or seek bankruptcy protection. It expects its 2004 net loss to be about $11.0 million versus about $4.8 million in 2003, and the late 10-K (flagged on April 1) awaits a goodwill impairment test on about $3.5 million of goodwill that could add to the loss.
On November 30, 2004 Digital Lifestyles closed a $7,500,000 credit facility with Laurus Master Fund: a $2,750,000 convertible minimum borrowing note and a $4,750,000 convertible revolving note, both maturing November 29, 2007 at prime plus 2%. Laurus can convert into stock at $0.39 per share and received a warrant for 3,846,154 shares at $0.44. Borrowing depends on inventory and receivables, and the loan is secured by substantially all assets other than intellectual property, with the Northgate Operating Company and hip-e Operating Company subsidiaries as guarantors. Conversion and the warrant could dilute shareholders, and a default could cost the company its assets (per the filing).
The company, now named Digital Lifestyles Group, Inc. and based in Austin, Texas (the filing does not explain the rename or move), raised about $5 million in a private placement completed September 14, 2004. It sold 14,450,858 common shares at $0.346 each with warrants for 7,225,426 more shares at $0.475, to 19 investors. A further 1,000,000-share warrant at $0.475 went to Westech Capital as a fee. Insiders, including CFO Theodore Muftic, CEO Kent Savage's affiliate and director Suhail Rizvi's affiliate, took part. The company must register the shares for resale, with penalty warrants for outside investors if it files late. For existing shareholders this means dilution (the filing states the share and warrant numbers).
What it means for a shareholder
14.5m new shares at $0.346 to raise about $5.0m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
