In connection with the rights offering, the Company also entered into an investment agreement with Matador Capital Partners, L.P., whereby Matador has agreed to purchase at the subscription price, between $1.0 million and $2.0 million worth of the shares of the Company's common stock not subscribed for and purchased by holders upon exercise of their subscription rights. The exact number of shares within the foregoing range will be determined by Matador in its discretion. Mr. Jeffrey A. Berg, one of the Company's directors, is the managing member of the general partner of Matador. As of the date hereof, Matador and Mr. Berg collectively beneficially own approximately 10.5% of the Company's common stock. As stockholders as of the record date, Matador and Mr. Berg will have the right to purchase shares under their basic subscription privilege, but they will not have the right to exercise their over-subscription privilege. Therefore, depending on the collective level of investment by all existing stockholders in connection with the rights offering, Matador and Mr. Berg may, based on their common stock ownership as of the date hereof, potentially invest up to $2.4 million into the Company in connection with the rights offering (i.e., up to $2.0 million under the investment agreement and approximately $419,000 pursuant to the exercise of their basic subscription privilege).
Michael Bush, the Company's President and Chief Executive Officer, also announced his intention to exercise his basic subscription privilege in full at a minimum. Mr. Bush currently owns 300,478 shares of the Company's common stock.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. The rights offering, which is expected to be launched immediately following the effectiveness of a registration statement relating to the offering, will be made only by means of a prospectus. The record date for the distribution of the subscription rights and the expiration date of the rights offering will be included in the final prospectus for the rights offering.
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