ERTH ----> going to 0
We presume Earthshell's last-ditch financing effort through Acqua Wellington to be a variation of a "toxic convertible". Acqua Wellington has been involved in other deals which have proven to be disasters for holders of the common stock...most notably: Egghead Inc. (NASDAQ: EGGSQ)
siliconvalley.com
The following is an excerpt from Earthshell's latest annual report:
<<<Sources of Capital. As part of the Company's initial public offering on March 27, 1998, the Company issued 10,526,316 shares of its common stock, $.01 par value, for which the Company received net proceeds of $206 million. On March 31, 2000, the Company filed a Registration Statement on Form S-3 to register 5,000,000 shares of its common stock, which became effective April 19, 2000. On May 3, 2000, the Company signed an agreement with Acqua Wellington North American Equities Fund, LTD ("Acqua Wellington"), pursuant to which the Company may, from time to time and in its sole discretion during the 12 months following the date of the agreement, present Acqua Wellington with draw-down notices requiring Acqua Wellington to purchase up to $2,500,000 of the Company's common stock in respect of each draw-down notice. The Company will issue and sell the shares to Acqua Wellington at a per share price equal to the average price of the Company's common stock over a period of time after the draw-down notice less a discount of 5%. The Company may present Acqua Wellington with up to 12 drawdown notices during the term of the agreement. In addition, the agreement gives Acqua Wellington the option to purchase an additional $2.5 million of the Company's common stock per month for the same twelve months, subject to certain conditions. In December 2000, the Company filed a new S-3 registration statement covering the issuance of up to 15 million additional shares of common stock. In addition, the Company obtained an extension of its commitment from Acqua Wellington for an additional 12 months.
Although the common stock purchase agreement with Acqua Wellington provides that the Company generally may not draw down unless the Company's common stock is trading at $3.00 per share or more, Acqua Wellington has continued to purchase shares from the Company from time-to-time at negotiated prices, when the market price for the Company's common stock is less than $3.00 per share.
During the three months ended March 31, 2000 the Company issued approximately 4.1 million shares of common stock to Acqua Wellington and received net proceeds from such issuance of approximately $5.5 million. >>> |
