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  • drmerch drmerch Sep 14, 2009 1:18 PM Flag

    How is HLCS Private Placement reflected

    in the balance sheet? They had 64,000,0000 shares out and then did a private placement in Dec 08 of unrestriced units. Can anybody explain before I step in.

    In December 2008, we entered into a securities purchase agreement with certain investors pursuant to which we sold a total of 42,753,869 units (the "Units"), each Unit consisting of (i) one share of common stock (collectively, the "Shares") and (ii) one warrant (collectively, the "Warrants") to purchase 0.6 shares of common stock at an exercise price of $0.45 per share, for a purchase price of $0.435 per unit (representing the closing bid price plus an additional amount for the warrants) (the "Offering"). The Warrants have a five year term and became exercisable immediately following the closing of the transaction. The closing of the transaction occurred on December 23, 2008. In connection with the Offering, we raised approximately $18.6 million in gross proceeds. We paid $813,000 in placement agent fees and offering expenses and expect to use the remaining net proceeds of $17.8 million for general corporate purposes.

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    • So this is concerning as it looks like they privately placed the units to an investor and maybe they don't have to report the stock until the investor dumps it into the market... If that is the case then one day we are going to see the shares outstanding jump from 64MM to 130MM and that is about as diluted as one gets....

      Someone needs to call the company or the transfer agent to get an accurate account of this...

      Good Luck

      • 1 Reply to nitesurfa
      • I think the majority of the shares are reflected in the 64 miilion. The outstanding share used to be less than 20 million before the dilution. I bought the shares of this company when the market was less than $10 million and the dilution severly limited my otherwise 18X gains.

        Another part of the "unit" was a warrant to buy shares at 45 cents a share, with each unit entitle 0.6 shares. Therefore, there is possible dilution event down the road.

        That was the worst deal ever, and CFO was outested for this.