Posted by: lowtrade
In reply to: None
§Date:12/7/2007 11:45:49 PM
Post #of 11074
SWVC 8k, as I see it.
I'm a back to basics guy. So will only cover the basics. Not the bull inbetween. All that does is protect each party with legalees! I'm sure the board will pick it appart, badly. But the only thing which matters is the basics!
opinion;
Tom S has continued to use his past relationships with VCs to funded his business plan for Seaways Valley Capital. (a holding company)
This debenture is for the next takeover and is expected to be closed for under $550k, because it states some being used for the Wisebuys/Hacketts restructure.
In order to secure the funding, he had to give extra warrants to the VC. Common on the OTC. And if the VC feels the first funding round under the debenture was profitable, and the company can continue to grow after. It will continue a second (equal $550k round of funding) by exercising an out right purchase of common, at the unknown discount. This discount is unknown, because it was not covered in this filling. PS, Cornell has already given up warrant rights in the past for 20 million shares of common.
All this is exactly what you see in the OTC everyday. And it answers why the PPs fell to 1 cent, when the double bottom chart pattern called for a move up to .042. Stocks are manipulated to the funding level all the time!!!!
As for how will this effect the stock. That's up to retail! So far retail has supported the company. Will it believe in the business plan & managements ability to execute the plan until profitable financials are reached.
The OTC is a casino not bank. Place your bet. The VCs like their odds, they must believe in retail, believeing in SWVC. Or He wouldn't get this funding, @ .01. Some private investors must also, or they wouldn't have taken a new $500k debenture at .024.
I always say do what the big guys do. IMO Tom S may screw retail, but I doubt he would screw his friends & family. He just got friends for $500k & relatives for $2.6 mill of resticted "C"s. If he doesn't have a plan to get long term value back into the stock, these people are screwed with reatail.
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The facts; of this 8k filing.
ITEM 1.01 ENTRY INTO MATERIAL DEFINITIVE AGREEMENT
On December 3, 2007 Seaway Valley Capital Corporation ("Seaway" or the
"Company") consummated a financing agreement with YA Global Investments, L.P. in
the form of a convertible debenture for total gross proceeds of $550,000 and a
warrant to purchase an additional 60 million shares of the Company's common
stock. The funds will be used for various business activities, including
effectuating an acquisition of 100% of the stock of an undisclosed company that
Seaway recently executed letter of intent ("LOI") to acquire. In addition, a
certain portion of the funds may be used to assist its recently acquired wholly
owned subsidiary, Hacketts, in the transition of WiseBuys stores into Hacketts
stores.
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The mistake being made is everone thinks this filing covers the total deal and it doesn't.
There is no info about the warrants for the second leg of the debeture (second closing > $175,000 for 20 million shares common) or the mentioned extra 60,000,000 purchase warrants.
Sub Document 3 & 4 only report the first closing > $375,000 for 40 million shares.
Also note the O/S reported in this filing was 732 mill and SWVC's Trans Agent resently reported 2 > 30 mill increases, increasing the O/S @ 824 mill.
So, IMO the warrant deal may be done! With an unknown amount of cash in the bank.
Doubt anyone will see detailed info on the second 60 mill in warrants, or second closing, until the next Q filing.
Now a little education;
Warrant
A derivative security that gives the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue as a "sweetener" to entice investors.
Debenture
A type of debt instrument that is not secured by physical asset or collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of bond in order to secure capital. Like other types of bonds, debentures are documented in an indenture.
Convertible Debenture
Any type of debenture that can be converted into some other security.
What is being covered in this filing is 2 items, the first the debenture is secured by stock in 2 steps and the second is out right warrants to buy common stock.
Only step one, of part one, has been shown in this filings Sub doc's 3 & 4.
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The deal: as reported in this filing!
$550,000 total debenture
$550,000 > at $375,000 for 40 milliom shares of common and $175,000 for 20 milliom shares of common.
This filing is for the first closing only.
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The deal
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Buyer(s),
as provided herein, and the Buyer(s) shall purchase (i) up to Five Hundred Fifty
Thousand Dollars ($550,000) of secured convertible debentures in the form
attached hereto as "Exhibit A" (the "Convertible Debentures"), which shall be
convertible into shares of the Company's common stock, par value $0.0001 (the
"Common Stock") (as converted, the "Conversion Shares"), and (ii) warrants
substantially in the form attached hereto as "Exhibit B" (the "Warrants"), to
acquire up to that number of additional shares of Common Stock set forth
opposite such Buyer's name on Schedule I (as exercised, the "Warrant Shares") of
which Three Hundred Seventy Five Thousand Dollars ($375,000) shall be funded
within three (3) business day following the date hereof (the "First Closing"),
and One Hundred Seventy Five Thousand Dollars ($175,000) shall be funded upon
the filing audited financial statements for the acquisition of Patrick Hackett
Hardware Company ("Hackett's") (the "Second Closing"), for a total purchase
price of up to Five Hundred Fifty Thousand Dollars ($550,000),
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YA Global Investments, L.P. $375,000 (First Closing) 40,000,000 shares > $175,000 (Second Closing) 20,000,000 shares. Plus 60 mill of new warrants.
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First closing
The Debenture
Issuance Date: November 30, 2007 Original Principal Amount: $375,000
No. SWVC-5-1
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The warrant
Warrant No.: SWVC-5-1 Number of Shares: 40,000,000
Warrant Exercise Price: $.01
Expiration Date: November30, 2012
Date of Issuance: November 30, 2007
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$375,000 / 40,000,000 shares = .009375
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