Hiermit aus? Das hörtsich doch nicht so gut an, oder????
Show all filings for GLOBAL MATRECHS, INC. | Request a Trial to NEW EDGAR Online Pro
Form 8-K for GLOBAL MATRECHS, INC.
--------------------------------------------------
13-Jan-2006
Entry into Material Agreement, Sale of Equity, Change in Directors or Princ
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
PRIVATE EQUITY CREDIT AGREEMENT
SUMMARY. On January 10, 2006, we entered into the Private Equity Credit Agreement with Brittany Capital Management Limited, a limited liability company organized and existing under the laws of The Bahamas. Under the Private Equity Credit Agreement, we may draw up to $15 million from time to time, at our discretion, in exchange for shares of our common stock, subject to conditions outside of the control of Brittany further described below.
PUT SHARES. Each draw under the Private Equity Credit Agreement is structured as a put option, wherein we require Brittany to purchase a number of shares of our common stock after a discount to the market price is applied. For a given put, we must deliver a notice to Brittany indicating the dollar amount we wish to draw down. Five trading days after delivery of this notice, Brittany must deliver this amount in two equal installments, one each on the fifth and tenth trading day following the delivery of the notice. In exchange, we must issue to Brittany, in the case of the first installment, the number of shares of common stock obtained by dividing the amount of the installment by 92% of the average of the three closing bid prices immediately preceding the installment date, and in the case of the second installment, the number of shares obtained by dividing the amount of the installment by 92% of the average of the three lowest closing bid prices during the ten trading day period immediately preceding the installment date. We refer to the shares we sell under the agreement as "put shares." The issuance of put shares to Brittany are to take place from time to time, at our discretion, over the course of a commitment period extending 36 months after the effective date of this registration statement covering the shares we may issue under the agreement.
We are required to draw down a minimum of one million dollars. If we draw a lesser amount, we must pay Brittany an amount equal to nine percent of the difference between that amount and the minimum. Based on our current assessment of our financing needs, we intend to draw in excess of the one million dollar minimum.
BLACKOUT SHARES. If we suspend sales of common stock pursuant to the registration statement covering the resale of the shares we issue under this agreement, we must, within 15 trading days of a sale of common stock to Brittany and our stock price declines during the suspension period, issue that number of additional shares of our common stock which, when combined with the shares purchased during the 15 trading days immediately preceding the suspension, will equal the number of shares Brittany would have received had the purchase been made at the conclusion of the suspension period (at the lower per share price). Any obligation to deliver blackout shares arising under the Private Equity Credit Agreement would be irrevocable, and Brittany would have no discretion regarding whether or not to receive them.
FEES. We are required to pay Greenfield Capital Partners, LLC, a registered broker-dealer, a finder's fee, in cash, equal to 1% of the amounts we draw down from the equity line as consideration for services related to the establishment of the Private Equity Credit Agreement.
NUMBER OF SHARES ISSUABLE UNDER THE PRIVATE EQUITY CREDIT AGREEMENT. We
cannot predict the actual number of shares of common stock that may be issued
under the Private Equity Credit Agreement, in part because the purchase price of
the shares will fluctuate based on prevailing market conditions and we have not
determined the total amount of cash advances we intend to draw. However, for
illustrative purposes, we have calculated the number of shares we would have to
issue in connection with a hypothetical draw amount of $50,000 based on the
assumptions set forth below:
SHARES ISSUABLE UNDER PRIVATE EQUITY CREDIT AGREEMENT FOR $50,000 DRAW AT
VARIOUS MARKET PRICES
========================= ======================= ===================
HYPOTHETICAL MARKET PRICE DISCOUNTED MARKET PRICE SHARES TO BE ISSUED
========================= ======================= ===================
$0.025 $0.0230 2,173,913
------------------------- ----------------------- -------------------
$0.020 $0.0187 2,717,391
------------------------- ----------------------- -------------------
$0.015 $0.0138 3,623,188
------------------------- ----------------------- -------------------
$0.010 $0.0092 5,434,783
------------------------- ----------------------- -------------------
$0.005 $0.0046 10,869,565
------------------------- ----------------------- -------------------
-2-
DILUTION. The issuance and sale of shares under the Private Equity Credit Agreement will have a significant dilutive impact on our stockholders for the following reasons:
o As described above, the lower our stock price is, the more shares we would have to issue for a given draw down amount, and the more shares we issue, the greater the extent of dilution to the ownership interest of our current stockholders.
o Because the shares we may issue under the Private Equity Credit Agreement are discounted, the issuance of these shares will also have a financially dilutive impact on our current stockholders.
o The Brittany's sale of material amounts of our common stock into the market may result in significant downward pressure on the price of the common stock as the supply of freely tradable shares increases. Furthermore, this downward pressure may encourage short sales, which could further depress on the price of the common stock.
Finally, if we are to utilize the full $15 million available under the Private Equity Credit Agreement, given the current price of our common stock, it is very likely our shareholder will need to approve an increase to the common stock available for issuance under our Certificate of Incorporation, whether by increasing the number of shares we are authorized to issue, effecting a reverse split of our common stock (thereby decreasing the number of shares outstanding), or both. At the market price of our common stock as of January 10, it would require 1,020,408,163 shares to draw down the full $15,000,000 available under the agreement, and we have only 144,349,989 shares of common stock available for issuance as of January 10, 2006.
The discussion in this current report is only a summary and is qualified
|
|
Thread abonnieren
