Oh well....so much for booking that Warrant revenue...
"...In addition to the above, upon VendingData�s initial placement of 1,000 gaming machines in operation with gaming operators identified by Elixir, VendingData will reduce by $1.00 the exercise price of all warrants (other than 6,000,000 common share warrants priced at $2.65) sold to Elixir pursuant to the securities purchase agreement entered into in October 2006 (the �2006 Warrants�). When the cumulative number of gaming machines under contract reaches 2,000 units and the cumulative number of gaming machines in operation reaches 1,000 units, VendingData will further reduce by $1.00 the exercise prices of the 2006 Warrants. When the cumulative number of machines under contract reaches 3,000 units and the cumulative number of machines in operation reaches 2,000 units, VendingData will further reduce by $1.00 the exercise prices of the 2006 Warrants. "
"Pursuant to a Securities Purchase Agreement dated October 11, 2006 between the Company and Elixir, the Company sold to Elixir, for the aggregate price of $2.65 million, one million shares of the Company's common stock and warrants to purchase an additional 16 million shares of common stock. The warrants are exercisable at exercise prices ranging from $2.65 to $5.50 per share for a period of 36 months beginning on March 31, 2007."
In http://sec.gov/Archives/edgar/data/1004673/000089256907001058/a31070ddef14a.htm#120 is:
"'2006 Warrants' means the following Common Stock purchase warrants sold by the Company to Elixir pursuant to the 2006 Purchase Agreement, each represented by a written warrant agreement, as amended, and expiring December 31, 2010:
(i) 6,000,000 shares of Common Stock at $2.65 per share (the '$2.65 Warrants');
(ii) 4,000,000 shares of Common Stock at $3.00 per share;
(iii) 2,000,000 shares of Common Stock at $3.50 per share;
(iv) 1,000,000 shares of Common Stock at $4.00 per share;
(v) 1,000,000 shares of Common Stock at $4.50 per share;
(vi) 1,000,000 shares of Common Stock at $5.00 per share; and
(vii) 1,000,000 shares of Common Stock at $5.50 per share."
Once there are placement agreements for a total of 3000 EGMs and actual placements of 2000 EGMs, the exercise prices, except for the $2.65 warrants in (i) above, will be $3 less. That will make the exercise price of the 4,000,000 warrants in (ii) zero, for instance.
Notice that the warrants' expiration date is Dec. 31, 2010.
The form of the COMMON STOCK PURCHASE WARRANT appearing as Exhibit B of SECURITIES PURCHASE AGREEMENT ( http://sec.gov/Archives/edgar/data/1004673/000114420406047790/v057555_ex10-3.htm ) has:
"THIS COMMON STOCK PURCHASE WARRANT (the 'Warrant') certifies that, for value received, _____________ (together with its successors or assigns the 'Holder'), is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after March 31, 2007 (the 'Initial Exercise Date') and on or prior to the close of business on December 31, 2009 (the 'Termination Date') but not thereafter, ..."
Vendingdata probably hoped for the 12/31/2009 expiration date when it filed http://sec.gov/Archives/edgar/data/1004673/000114420406047790/v057555_ex10-3.htm , but now it turns out that the expiration date is 12/31/2010. My opinion is that Elixir pushed for the later date since it doesn't want to exercise any of the warrants even one second before expiration--unless the exercise price is zero, of course.