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Entertainment Gaming Asia Inc. Message Board

  • pjv2xyw9dww4b5 pjv2xyw9dww4b5 Nov 28, 2006 7:45 PM Flag

    mid-November price drop

    pj has a story to tell. You decide whether to believe it or not.

    It is a dark and stormy night in September, 2006. Vendingdata needs money.

    {In the 3rd quarter 10-Q (http://www.sec.gov/Archives/edgar/data/1004673/000114420406047790/v057555_10qsb.htm ) filed in November is: �However, in the event that we are unable to sell the non-gaming assets of Dolphin we believe that we will require up to $5 million of additional capital in order to fund our current commitments and plan of operations over the next 12 months.�}

    Bricoleur has 3.2 million warrants whose exercise price is $2.50. The VNX share price is not high enough to make their exercise likely. VNX would like Bricoleur to exercise them, so VNX approaches Bricoleur with a proposal to reduce the exercise price to $2.00 and to reduce the number of warrants to 2.6 million (so that the change isn�t such an obvious giveaway to Bricoleur).

    Furthermore, since VNX reasons that Bricoleur is unlikely to exercise warrants even at $2.00 if the shares it receives are unregistered for sale, and registration will take time (something of which, like working capital, VNX doesn�t have a lot), dropping restrictions on Bricoleur�s selling short is the way to make Bricoleur most likely to exercise the warrants.

    {In the AMENDED AND RESTATED SECURITIES PUT AGREEMENT ( http://www.sec.gov/Archives/edgar/data/1004673/000114420406018877/v042172_ex10-2.htm ) is:
    "4.7 Short Sales and Confidentiality After The Date Hereof. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will engage in any transactions, including any Short Sales, in the securities of the Company during the period commencing at the Discussion Time and ending at the time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will engage in any Short Sales in the securities of the Company during the period commencing at the Discussion Time and ending on the Effective Date ("Black-out Termination Date")."

    where the Effective Date is defined by

    ""Effective Date" means the date that the initial Registration Statement filed by the Company pursuant to the Registration Rights Agreement is first declared effective by the Commission."}

    Now, when does Bricoleur begin the short-selling? Answer: when the 15-business-day put option exercise period that starts with the filing on Nov. 14 of the 3rd quarter 10-Q begins. What better time is there (at least, from Bricoleur�s point of view) to take actions that may depress the VNX share price?

    {In the AMENDED AND RESTATED SECURITIES PUT AGREEMENT (http://www.sec.gov/Archives/edgar/data/1004673/000114420406018877/v042172_ex10-2.htm ) is:
    �The Company shall be entitled to send a Subscription Notice only during the fifteen Business Day period immediately following the Company�s filing with the Commission of an Annual Report on Form 10-K or 10-KSB or Quarterly Report on Form 10-Q or 10-QSB.�}

    Bricoleur begins selling short around Nov. 14. We see telltale evidence in http://finance.yahoo.com/q/hp?s=VNX&a=10&b=1&c=2006&d=10&e=28&f=2006&g=d .

    Posts commenting on this fine work of�.fiction�� are welcome, of course!

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