To approve, in accordance with NYSE American Company Guide Rule 713(a), the issuance of up to 4,000,000 shares of common stock of the Company to SREP III and Efanur in connection with a rights offering.
The Company is asking holders of common stock to approve the issuance of up to an aggregate of 4,000,000 shares of common stock to SREP III and Efanur pursuant to their respective Notes in connection with a Rights Offering. In connection with a Rights Offering the Company will enter into a backstop agreement for the Backstop Commitment with SREP III pursuant to which SREP III will agree to purchase from the Company, at a price per share of $2.50, a number of shares of common stock equal to the number of shares of common stock not purchased by other shareholders in the Rights Offering. Efanur, with the consent of SREP III, may be permitted to participate in the Backstop.
If the IRSA Note is converted in full, Efanur would acquire 1,111,823 shares of common stock in a Rights Offering at a purchase price of $2.50. If the StepStone Note is converted in full, SREP III will acquire 2,888,177 shares of common stock in a Rights Offering at a purchase price of $2.50 per share.
Pursuant to their respective Notes, SREP III and Efanur will be eligible to receive shares of common stock in either a Rights Offering or a Non-Rights Offering Conversion, but not both.
If Efanur is permitted to participate in the Backstop Commitment, the number of shares of common stock that SREP III would receive pursuant to the Backstop Commitment would be reduced by the number of shares of common stock that Efanur is permitted to acquire as part of its participation in the Backstop Commitment.
The 4,000,000 shares of common stock which may be issued to SREP III and Efanur in the Rights Offering or pursuant to the Backstop Commitment would equal approximately 33.3% of the outstanding common stock of the Company, and the purchase price of $2.50 per share would be less than the greater of book or market value per share of the common stock at the time the parties entered into the respective Notes. NYSE American Company Guide Rule 713(a) requires shareholder approval of a transaction, other than a public offering, involving the sale, issuance or potential issuance by an issuer of common stock (or securities convertible into or exercisable for common stock) at a price less than the greater of book or market value which together with sales by officers, directors or principal shareholders of the issuer equals 20% or more of presently outstanding common stock, or equal to 20% or more of presently outstanding stock for less than the greater of book or market value of the stock, or when the issuance or potential issuance of additional shares will result in a change of control of the issuer.
Shareholder approval of this Proposal One will constitute shareholder approval for purposes of NYSE American Company Guide Rule 713(a).
Required Vote and Board Recommendations
The issuance of shares pursuant to Proposal One requires the receipt of the affirmative vote of a majority of the shares of the common stock present in person or by proxy voting at the Special Meeting.
The Board recommends a vote “FOR” the approval of the issuance of shares of common stock pursuant to Proposal One to comply with NYSE American Company Guide Rule 713(a).
To approve, in accordance with NYSE American Company Guide Rule 713(a), the issuance of up to 4,000,000 shares of common stock of the Company in a private placement to SREP III and Efanur.
The Company is asking holders of common stock to approve the issuance of up to an aggregate of 4,000,000 shares of common stock to SREP III and Efanur pursuant to their Notes in connection with a Non-Rights Offering Conversion.
If the IRSA Note is converted in full, Efanur would acquire 1,111,823 shares of common stock in a Non-Rights Offering Conversion at a purchase price of $2.50 per share. If the StepStone Note is converted in full, SREP III will acquire 2,888,177 shares of common stock in a Non-Rights Offering Conversion at a purchase price of $2.50 per share.