Read it and weep, pal. This is from TODAY'S filing! It's not me that needs to do DD.
On September 25, JAWS entered into a $2,000,000, 10% Convertible Debenture
Agreement with Thomson Kernaghan & Co. Limited ("Thompson Kernaghan") and
1,428,572 warrants to purchase 1,428,572 common shares at $0.28 per common
share. The Thomson Kernaghan warrants expire on October 31, 2002 and may be
exercised in whole or in part, from time to time, prior to October 31, 2002 in
accordance with the terms of the Thomson Kernaghan warrants and the amended
debenture agreement. The Thomson Kernaghan warrants are assignable, and
non-callable. Around this time JAWS also entered into an agreement with Bristol
Asset Management LLC ("Bristol") whereby JAWS was given the right to obligate
Bristol to buy up to 25,000,000 shares of Common Stock for up to $7,000,000 in
"put" options. However, on April 20, 1999 JAWS and Bristol mutually terminated
the agreement and Bristol received, in consideration for the termination,
1,000,000 warrants to purchase 1,000,000 shares of common stock at $0.70 per
share until April 15, 2002.
On April 27, 1999, JAWS and Thomson Kernaghan amended the debenture
agreement, increasing the amount available to $5,000,000. To date, $1,520,000
of the $5 million available under the amended debenture agreement has been
advanced in accordance with the terms of debentures issued by JAWS, as follows:
<TABLE>
<CAPTION>
ADVANCE DATE DEBENTURE ISSUED CONVERSION RATE
------------------------ -----------------
<S> <C> <C>
September 25, 1998 . . . $ 200,000 $0.1118 per share
------------------------ ----------------- -----------------
November 10, 1998. . . . $ 10,000 $0.1118 per share
------------------------ ----------------- -----------------
November 10, 1998. . . . $ 110,000 $ 0.28 per share
------------------------ ----------------- -----------------
December 12, 1998. . . . $ 100,000 $ 0.28 per share
------------------------ ----------------- -----------------
January 26, 1999 . . . . $ 250,000 $ 0.28 per share
------------------------ ----------------- -----------------
January 26, 1999 . . . . $ 250,000 $ 0.40 per share
------------------------ ----------------- -----------------
April 16, 1999 . . . . . $ 600,000 $ 0.65 per share
------------------------ ----------------- -----------------
</TABLE>
Prior to the amendment of the debenture agreement, JAWS received a notice to
convert $210,000 plus interest in the amount of $3,798, at $0.1118, which will
result in the issuance of 1,912,317 shares. $10,000 of the notice to convert
relates to funds advanced on November 10, 1998. The balance of the funds
advanced on November 10, 1998 ($110,000) will be converted at $0.28. All funds
have been allocated toward working capital.
There have been subsequent private placements between December 1998 and
June 1999 (See Item 10 - Recent Sales of Unregistered Securities) whereby JAWS
has received an aggregate investment of $2,973,300 which resulted in the
issuance of 4,361,949 shares at a price per share between $0.32 and $1.50.
Included in these numbers is a material private placement by Glentel Inc.,
resulting in JAWS issuing 1,000,000 shares of common stock at a price of $1.50
per share. The proceeds from these private placements have been allocated
toward the working capital of JAWS. The Glentel private placement also included
834,000 warrants to purchase 834,000 common shares at $2.25 per share until June
30, 2001.
JAWS'earlier attempts to register the shares underlying the debentures to
be issued in accordance with the amended debenture agreement have been
unsuccessful and the Securities Exchange Commission has taken the view that
Thomson Kernaghan is the underwriter of an indirect primary offering of the
common stock acquired through the convertible debentures. Therefore, until and
unless the common stock underlying the convertible debentures issued, and to be
issued, in accordance with the amended debenture agreement are registered
through a NASD member firm, Thomson Kernaghan is not obligated to fund under the
amended debenture agreement. If registration of the shares underlying the
Thomsan Kernaghan convertible debentures is effected and underwritten by an NASD
member firm in a future registration, the balance of the financing equal to
$3,480,000 may, at the option of JAWS, be taken down within a reasonable period
from the date of effectiveness of the future registration statement. The
$3,480,000, if drawn down, may be converted with a fixed minimum conversion
price of $0.40 per common share.
In connection with the amended debenture agreement, Thomson Kernaghan received
warrants to purchase 1,428,572 common shares exercisable at $0.28 per common
share and warrants to purchase 923,077 common shares at $0.65 per share.
Additionally, there is a finance fee of 10% of the first $2,000,000 amount
funded through the purchase of debentures and 8% of the proceeds funded in
excess of $2,000,000. The finance fee may be paid in cash or funded on a
combination of cash and unregistered common stock. At the option of JAWS, 37.5%
of the finance fee may be paid by the issuance of the unregistered common stock.
In connection with the amended debenture agreement, JAWS has undertaken to
register and will continue in its efforts to register on Form SB-2 one hundred
percent (100%) of the common shares underlying the debentures and the warrants
upon entering into an underwriting agreement with an NASD member firm.
Thomson Kernaghan has acquired and, in the future, upon requirements of
the Securities Exchange Commission being fulfilled by JAWS, Thomson Kernaghan
will acquire, the debentures under the amended debenture agreement in a
transaction that is exempt from registration requirements under Regulation S.
Thomson Kernaghan is a purchaser who is not a U.S. person, as defined by Rule
902(k) of Regulation S. |
