As filed with the Securities and Exchange Commission December 12, 2014
Registration Statement No. 333-_____________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
IEG Holdings Corporation
(Exact name of registrant as specified in its charter)
Florida | 6141 | 65-0888146 | ||
(State or other jurisdiction of
incorporation or organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification No.) |
6160 West Tropicana Ave, Suite E-13
Las Vegas, NV 89103
(702) 227-5626
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Paul Mathieson
Chief Executive Officer
6160 West Tropicana Ave, Suite E-13
Las Vegas, NV 89103
(702) 227-5626
(Name, address and telephone number of agent for service)
With copies to:
Laura Anthony, Esq.
Legal & Compliance, LLC
330 Clematis Street, Suite 217
West Palm Beach, FL 33401
Phone: (800) 341-2684
Approximate date of proposed sale to public: As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on the Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering: [ ]
Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | [ ] | Accelerated filer | [ ] |
Non-accelerated filer | [X] (Do not check if a smaller reporting company) | Smaller reporting company | [ ] |
CALCULATION OF REGISTRATION FEE
Title
of Each Class of Securities to be
Registered |
Amount
to be
Registered |
Proposed
Maximum Offering Price per Share |
Proposed
Maximum Aggregate Offering Price (2) |
Amount
of
Registration Fee |
||||||||||||
Common stock, par value $0.001 per share, by Selling Stockholders | 172,965,945 | (1) | $ | 1.00 | (2) | $ | 172,965,945.00 | $ | 20,098.64 |
(1) | Represents shares offered for resale by certain selling stockholders. |
(2) | Estimated solely for purposes of calculating the registration fee in accordance with Rule 457 of the Securities Act of 1933, as amended, based on the last sale reported on December 8, 2014. |
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a) may determine.
The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION, DATED DECEMBER 12, 2014 |
172,965,945 Shares
IEG Holdings Corporation
Common Stock
This prospectus relates to the resale of up to 172,965,945 shares of our common stock by the selling stockholders named in this prospectus. This prospectus may be used by the selling stockholders named herein to resell, from time to time, those shares of our common stock included herein. For information about the selling stockholders see “Principal and Selling Stockholders” on page 29. Our common stock is presently quoted on the Pink Current Information tier of the OTC Markets Group, Inc. under the trading symbol “IEGH”. On December 8, 2014, the last sale price of our common stock as reported by the OTC Markets was $1.00 per share.
The selling stockholders may offer to sell their shares of common stock from time to time through public or private transactions, on or off of the OTC Markets at prevailing market prices, at prices related to the prevailing market prices, at fixed prices that may be changed, or at privately negotiated prices. We will not receive any of the proceeds from the sale of the shares of common stock by the selling stockholders.
The selling stockholders, and any participating broker-dealers, may be deemed to be “underwriters” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), and any commissions or discounts given to any such broker-dealer may be regarded as underwriting commissions or discounts under the Securities Act. The selling stockholders have informed us that they do not have any agreement or understanding, directly or indirectly, with any person to distribute their common stock. We will be responsible for all fees and expenses incurred in connection with the preparation and filing of the registration statement of which this prospectus is a part; provided, however, that we will not be required to pay any underwriters’ discounts or commissions relating to the securities covered by the registration statement.
We are an “emerging growth company” as defined in the Securities and Exchange Commission (“SEC”) rules and we will be subject to reduced public reporting requirements. See “Emerging Growth Company Status.” Our common stock is subject to the “penny stock” rules of the SEC.
Persons effecting transactions in the shares should confirm the registration of these securities under the securities laws of the states in which transactions occur or the existence of applicable exemptions from such registration.
THE SHARES BEING OFFERED ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. THEY SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE “RISK FACTORS” BEGINNING ON PAGE 7 OF THIS PROSPECTUS FOR A DISCUSSION OF INFORMATION THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN OUR SECURITIES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
You should rely only on the information contained in this prospectus. We have not, and the selling stockholders have not, authorized anyone to provide you with different information from that contained in this prospectus or in any free writing prospectus that we may authorize. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock. This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy the securities in any circumstances under which the offer or solicitation is unlawful. Neither the delivery of this prospectus nor any distribution of securities in accordance with this prospectus shall, under any circumstances, imply that there has been no change in our affairs since the date of this prospectus.
The date of this prospectus is ______________, 2014.
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TABLE OF CONTENTS
No dealer, salesperson or other individual has been authorized to give any information or to make any representation other than those contained in this prospectus in connection with the offer made by this prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by us or the selling stockholders. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in our affairs or that information contained herein is correct as of any time subsequent to the date hereof.
For investors outside the United States: We have not and the selling stockholders have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside the United States.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes “forward-looking statements” within the meaning of the federal securities laws that involve risks and uncertainties. Forward-looking statements include statements we make concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. Some forward-looking statements appear under the headings “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations’” and “Business.” When used in this prospectus, the words “estimates,” “expects,” “anticipates,” “projects,” “forecasts,” “plans,” “intends,” “believes,” “foresees,” “seeks,” “likely,” “may,” “might,” “will,” “should,” “goal,” “target” or “intends” and variations of these words or similar expressions (or the negative versions of any such words) are intended to identify forward-looking statements. All forward-looking statements are based upon information available to us on the date of this prospectus.
These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, among other things, the matters discussed in this prospectus in the sections captioned “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations’” and “Business.” Some of the factors that we believe could affect our results include:
● | limitations on our ability to continue operations and implement our business plan; | |
● | our history of operating losses; | |
● | the timing of and our ability to obtain financing on acceptable terms; | |
● | the effects of changing economic conditions; | |
● | the loss of members of the management team or other key personnel; | |
● | competition from larger, more established companies with greater economic resources than we have; | |
● | costs and other effects of legal and administrative proceedings, settlements, investigations and claims, which may not be covered by insurance; | |
● | costs and damages relating to pending and future litigation; | |
● | control by our principal equity holders; and | |
● | the other factors set forth herein, including those set forth under “Risk Factors.” |
There are likely other factors that could cause our actual results to differ materially from the results referred to in the forward-looking statements. All forward-looking statements attributable to us in this prospectus apply only as of the date of this prospectus and are expressly qualified in their entirety by the cautionary statements included in this prospectus. We undertake no obligation to publicly update or revise forward-looking statements to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events, except as required by law.
We are responsible for the disclosure in this prospectus. However, this prospectus includes industry data that we obtained from internal surveys, market research, publicly available information and industry publications. The market research, publicly available information and industry publications that we use generally state that the information contained therein has been obtained from sources believed to be reliable. The information therein represents the most recently available data from the relevant sources and publications and we believe remains reliable. We did not fund and are not otherwise affiliated with any of the sources cited in this prospectus. Forward-looking information obtained from these sources is subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this prospectus.
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This summary highlights certain significant aspects of our business and this offering, but it is not complete and does not contain all of the information that you should consider before making your investment decision. You should carefully read the entire prospectus and the information incorporated by reference into this prospectus, including the information presented under the section entitled “Risk Factors” and the financial data and related notes, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from future results contemplated in the forward-looking statements as a result of factors such as those set forth in “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.” Certain historical information in this prospectus has been adjusted to reflect the 1-for-6 reverse stock split of our common stock that was effective February 22, 2013.
In this prospectus, unless the context indicates otherwise, “IEG Holdings,” the “Company,” “we,” “our,” “ours” or “us” refer to IEG Holdings Corporation, a Florida corporation, and its subsidiaries.
Our Company
We were organized as a Florida corporation on January 21, 1999, under the name Interact Technologies, Inc. and previously operated under the names Fairhaven Technologies, Inc. and Ideal Accents, Inc. We changed our name to IEG Holdings Corporation in February 2013. Since September 2010, we commenced operations to establish the business of providing unsecured consumer loans ranging from $2,000 - $10,000 and offer loans online under the consumer brand “Mr. Amazing Loans”. The Company is headquartered in Las Vegas, Nevada and currently originates direct consumer loans in the states of Nevada, Florida, Illinois, Arizona, Georgia, Missouri, Virginia, Texas and New Jersey via its website and online distribution network. The Company is a fully licensed consumer installment loan provider in the nine states in which it operates and offers all loans within the prevailing statutory rates.
On January 25, 2013, Investment Evolution Global Corporation (“IEGC”) entered into a stock exchange agreement (the “Stock Exchange Agreement”) among IEGC, its sole shareholder IEG Holdings Limited, an Australian company (“IEG”) and our company. Under the terms of the Stock Exchange Agreement, we agreed to acquire a 100% interest in IEGC for 272,447,137 shares of our common stock after giving effect to a 1-for-6 reverse stock split. On February 14, 2013 we filed amended articles of incorporation (the “Amended Articles”) with the Secretary of State of Florida which had the effect of:
● | changing our name from Ideal Accents, Inc. to IEG Holdings Corporation, | |
● | increasing the number of shares of our authorized common stock to 1,000,000,000, $.001 par value, | |
● | creating 50,000,000 shares of “blank-check” preferred stock, and | |
● | effecting a 1-for-6 reverse stock split of our issued and outstanding common stock (the “Reverse Stock Split”) pursuant to the terms of the Stock Exchange Agreement. |
FINRA approved our Amended Articles on March 11, 2013.
On March 13, 2013, we completed the acquisition of IEGC under the terms of the Stock Exchange Agreement and issued to IEG 272,447,137 shares of our common stock after giving effect to the Reverse Stock Split whereby we acquired a 100% interest in IEGC. As a result of the ownership interests of IEG in our company and its former ownership interest in IEGC, for financial statement reporting purposes, our acquisition of IEGC has been treated as a reverse acquisition with the IEGC being the accounting acquirer.
During the fiscal year ended December 31, 2013, we generated revenue of $62,949, and had a net loss of $4,477,975. During the nine months ended September 30, 2014, we generated revenue of $239,832, and had a net loss of $4,308,962.
Emerging Growth Company Status
We are an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We intend to take advantage of all of these exemptions.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards, and delay compliance with new or revised accounting standards until those standards are applicable to private companies. We have elected to take advantage of the benefits of this extended transition period.
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We could be an emerging growth company until the last day of the first fiscal year following the fifth anniversary of our first common equity offering, although circumstances could cause us to lose that status earlier if our annual revenues exceed $1.0 billion, if we issue more than $1.0 billion in non-convertible debt in any three-year period or if we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act.
Company Information
Our principal office is located at 6160 West Tropicana Ave, Suite E-13, Las Vegas, NV 89103 and our phone number is (702) 227-5626. Our corporate website address is www.investmentevolution.com . Information contained on, or accessible through, our website is not a part of, and is not incorporated by reference into, this prospectus.
The Offering
Issuer | IEG Holdings Corporation | |
Common stock offered by the selling stockholders | 172,965,945 shares | |
Common stock outstanding before this offering | 1,872,598,662 shares | |
Common stock to be outstanding after this offering | 1,872,598,662 shares | |
Offering price per share | The selling stockholders may offer to sell their shares of common stock from time to time through public or private transactions, on or off of the OTC Markets at prevailing market prices, at prices related to the prevailing market prices, at fixed prices that may be changed, or at privately negotiated prices. | |
Use of proceeds | We will not receive any proceeds from the sale of common stock by the selling stockholders in this offering. See “Use of Proceeds” and “Principal and Selling Stockholders.” | |
Risk factors | See “Risk Factors” beginning on page 7 of this prospectus for a discussion of some of the factors you should carefully consider before deciding to invest in our common stock. | |
OTC trading symbol | IEGH |
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SUMMARY HISTORICAL FINANCIAL DATA
The following table presents our summary historical financial data for the periods indicated. The summary historical financial data for the years ended December 31, 2013 and 2012 and the balance sheet data as of December 31, 2013 and 2012 are derived from the audited financial statements. The summary historical financial data for the nine months ended September 30, 2014 and 2013 and the balance sheet data as of September 30, 2014 and 2013 are derived from the unaudited financial statements included herein. The unaudited financial statements include, in the opinion of management, all adjustments consisting of only normal recurring adjustments, that management considers necessary for the fair presentation of the financial information set forth in those statements.
Historical results are included for illustrative and informational purposes only and are not necessarily indicative of results we expect in future periods, and results of interim periods are not necessarily indicative of results for the entire year. You should read the following summary financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes appearing elsewhere in this prospectus.
Year Ended December 31, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2014 | 2013 | |||||||||||||
Statement of Operations Data | ||||||||||||||||
Total revenues | $ | 56,585 | $ | 28,950 | $ | 239,832 | $ | 38,453 | ||||||||
Total operating expenses | 4,345,539 | 2,494,321 | 4,151,932 | 3,346,164 | ||||||||||||
Loss from operations | (4,282,590 | ) | (2,456,542 | ) | (3,912,100 | ) | (3,307,711 | ) | ||||||||
Total other income (expense) | (195,385 | ) | (50,980 | ) | (396,862 | ) | (143,726 | ) | ||||||||
Net loss | $ | (4,477,975 | ) | $ | (2,507,522 | ) | (4,308,962 | ) | (3,451,437 | ) |
Balance Sheet Data (at period end) | ||||||||||||||||
Cash and cash equivalents | $ | 281,879 | $ | 178,601 | $ | 2,367,308 | $ | 134,579 | ||||||||
Working capital (1) | (280,786 | ) | (1,207,909 | ) | 2,497,574 | (1,456,708 | ) | |||||||||
Total assets | 922,140 | 791,196 | 5,093,570 | 574,141 | ||||||||||||
Total liabilities | (2,923,596 | ) | (1,858,111 | ) | (4,143,010 | ) | 2,298,801 | |||||||||
Stockholders’ equity (deficit) | (2,001,456 | ) | (1,066,915 | ) | 950,560 | (1,724,660 | ) |
(1) Working capital represents total current assets less total current liabilities.
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Investment in our common stock involves a number of substantial risks. You should not invest in our stock unless you are able to bear the complete loss of your investment. In addition to the risks and investment considerations discussed elsewhere in this prospectus, the following factors should be carefully considered by anyone purchasing the securities offered through this prospectus. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks actually occur, our business could be harmed. In such case, the trading price of our common stock could decline and investors could lose all or a part of the money paid to buy our common stock.
Risks Related to Our Business and Industry
Our limited operating history makes our future prospects and financial performance unpredictable, which may impair our ability to manage our business and your ability to assess our prospects.
We commenced operations in 2010 and as a result, we have a limited operating history upon which a potential investor can evaluate our prospects and the potential value of an investment in our company. We remain subject to the risks inherently associated with new business enterprises in general and, more specifically, the risks of a new financial institution and, in particular, a new Internet-based financial institution. Our prospects are subject to the risks and uncertainties frequently encountered by companies in their early stages of development, including the risk that we will not be able to implement our business strategy. We have not made an operating profit since incorporation and the current scale of our operations is insufficient to achieve profitability.
We are highly dependent on our credit facility.
We are highly dependent on our credit facility with BFG Loan Holdings, LLC to execute on our growth plans and operate our business. An amendment to the credit facility loan agreement was made effective on June 30, 2014 which extended the Term Conversion Date past June 30, 2014 and allows us to continue drawing down from the facility to fund our loan originations. Under the amended agreement, the Term Conversion Date is at the discretion of the lender and there is no guarantee when the lender will convert the facility to a term loan. It would be very difficult to find a financing source to replace our current lender if it elected not to lend any additional amounts in our company. The loss of our credit facility or future renewals of that financing arrangement could have a material adverse effect on our business. Upon conversion to a term loan, monthly principal and interest payments equal to 100% of the consumer loan proceeds will be due. This credit facility terminates on June 1, 2016.
Because our officers and board of directors will make all management decisions, you should only purchase our common stock if you are comfortable entrusting our directors to make all decisions .
Our board of directors will have the sole right to make all decisions with respect to our management. Investors will not have an opportunity to evaluate the specific projects that will be financed with future operating income. You should not purchase our common stock unless you are willing to entrust all aspects of our management to our officers and directors.
We may not be able to implement our plans for growth successfully, which could adversely affect our future operations.
Since launching online lending in July 2013, the amount we have lent to borrowers (our loan book) has grown 2040% from $237,000 at June 30, 2013 to $5,071,022 at November 28, 2014. We expect to continue to grow our loan book and number of customers at an accelerated rate following completion of this offering. Our future success will depend in part on our continued ability to manage our growth. We may not be able to achieve our growth plans, or sustain our historical growth rates or grow at all. Various factors, such as economic conditions, regulatory and legislative considerations and competition, may also impede our ability to expand our market presence. If we are unable to grow as planned, our business and prospects could be adversely affected.
Our inability to manage our growth could harm our business.
We anticipate that our loan book and customer base will continue to grow significantly over time. To manage the expected growth of our operations and personnel, we will be required to, among other things:
● | improve existing and implement new transaction processing, operational and financial systems, procedures and controls; | |
● | maintain effective credit scoring and underwriting guidelines; and | |
● | increase our employee base and train and manage this growing employee base. |
If we are unable to manage growth effectively, our business, prospects, financial condition and results of operations could be adversely affected.
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We may need to raise additional capital that may not be available, which could harm our business.
Our growth will require that we generate additional capital either through retained earnings or the issuance of additional debt or equity securities. Additional capital may not be available on terms acceptable to us, if at all. Any equity financings could result in dilution to our stockholders or reduction in the earnings available to our common stockholders. If adequate capital is not available or the terms of such capital are not attractive, we may have to curtail our growth and our business, and our business, prospects, financial condition and results of operations could be adversely affected.
As an online consumer loan company whose principal means of delivering personal loans is the Internet, we are subject to risks particular to that method of delivery.
We are predominantly an online consumer loan company and there are a number of unique factors that Internet-based loan companies face. These include concerns for the security of personal information, the absence of personal relationships between lenders and customers, the absence of loyalty to a conventional hometown branch, customers’ difficulty in understanding and assessing the substance and financial strength of an online loan company, a lack of confidence in the likelihood of success and permanence of online loan companies and many individuals’ unwillingness to trust their personal details and financial future to a relatively new technological medium such as the Internet. As a result, some potential customers may be unwilling to establish a relationship with us.
Conventional “brick and mortar” consumer loan companies, in growing numbers, are offering the option of Internet-based lending to their existing and prospective customers. The public may perceive conventional established loan companies as being safer, more responsive, more comfortable to deal with and more accountable as providers of their lending needs. We may not be able to offer Internet-based lending that has sufficient advantages over the Internet-based lending services and other characteristics of conventional “brick and mortar” consumer loan companies to enable us to compete successfully.
We may not be able to make technological improvements as quickly as some of our competitors, which could harm our ability to compete with our competitors and adversely affect our results of operations, financial condition and liquidity.
Both the Internet and the financial services industry are undergoing rapid technological changes, with frequent introductions of new technology-driven products and services. In addition to improving the ability to serve customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs. Our future success will depend in part upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations. We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers. If we are unable, for technical, legal, financial or other reasons, to adapt in a timely manner to changing market conditions, customer requirements or emerging industry standards, our business, prospects, financial condition and results of operations could be adversely affected.
A significant disruption in our computer systems or a cyber security breach could adversely affect our operations.
We rely extensively on our computer systems to manage our loan origination and other processes. Our systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyber security breaches, vandalism, severe weather conditions, catastrophic events and human error, and our disaster recovery planning cannot account for all eventualities. If our systems are damaged, fail to function properly or otherwise become unavailable, we may incur substantial costs to repair or replace them, and may experience loss of critical data and interruptions or delays in our ability to perform critical functions, which could adversely affect our business and results of operations. Any compromise of our security could also result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, loss or misuse of the information and a loss of confidence in our security measures, which could harm our business.
If our estimates of loan receivable losses are not adequate to absorb actual losses, our provision for loan receivable losses would increase, which would adversely affect our results of operations.
We maintain an allowance for loans receivable losses. To estimate the appropriate level of allowance for loan receivable losses, we consider known and relevant internal and external factors that affect loan receivable collectability, including the total amount of loan receivables outstanding, historical loan receivable charge-offs, our current collection patterns, and economic trends. If customer behavior changes as a result of economic conditions and if we are unable to predict how the unemployment rate, housing foreclosures, and general economic uncertainty may affect our allowance for loan receivable losses, our provision may be inadequate. Our allowance for loan receivable losses is an estimate, and if actual loan receivable losses are materially greater than our allowance for loan receivable losses, our financial position, liquidity, and results of operations could be adversely affected.
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Our risk management efforts may not be effective.
We could incur substantial losses and our business operations could be disrupted if we are unable to effectively identify, manage, monitor, and mitigate financial risks, such as credit risk, interest rate risk, prepayment risk, liquidity risk, and other market-related risks, as well as operational risks related to our business, assets and liabilities. Our risk management policies, procedures, and techniques, including our scoring methodology, may not be sufficient to identify all of the risks we are exposed to, mitigate the risks we have identified or identify additional risks to which we may become subject in the future.
We face strong competition for customers and may not succeed in implementing our business strategy.
Our business strategy depends on our ability to remain competitive. There is strong competition for customers from personal loan companies and other types of consumer lenders, including those that use the Internet as a medium for lending or as an advertising platform. Our competitors include:
● | large, publicly-traded, state-licensed personal loan companies such as SpringLeaf Holdings, World Acceptance Corporation, and OneMain Financial, a subsidiary of CitiGroup; | |
● | peer-to-peer lending companies such as Lending Club and Prosper | |
● | recent startup state-licensed personal loan companies such as Avant Credit; | |
● | “brick and mortar” personal loan companies, including those that have implemented websites to facilitate online lending; and | |
● | payday lenders, tribal lenders and other online consumer loan companies. |
Some of these competitors have been in business for a long time and have name recognition and an established customer base. Most of our competitors are larger and have greater financial and personnel resources. In order to compete profitably, we may need to reduce the rates we offer on loans, which may adversely affect our business, prospects, financial condition and results of operations. To remain competitive, we believe we must successfully implement our business strategy. Our success depends on, among other things:
● | having a large and increasing number of customers who use our loans for financing needs; | |
● | our ability to attract, hire and retain key personnel as our business grows; | |
● | our ability to secure additional capital as needed; | |
● | our ability to offer products and services with fewer employees than competitors; | |
● | the satisfaction of our customers with our customer service; | |
● | ease of use of our websites; and | |
● | our ability to provide a secure and stable technology platform for providing personal loans that provides us with reliable and effective operational, financial and information systems. |
If we are unable to implement our business strategy, our business, prospects, financial condition and results of operations could be adversely affected.
We depend on third-party service providers for our core operations including online lending and loan servicing, and interruptions in or terminations of their services could materially impair the quality of our services.
We rely substantially upon third-party service providers for our core operations, including online web lending and marketing and vendors that provide systems that automate the servicing of our loan portfolios which allow us to increase the efficiency and accuracy of our operations. These systems include tracking and accounting of our loan portfolio as well as customer relationship management, collections, funds disbursement, security and reporting. This reliance may mean that we will not be able to resolve operational problems internally or on a timely basis, which could lead to customer dissatisfaction or long-term disruption of our operations. If these service arrangements are terminated for any reason without an immediately available substitute arrangement, our operations may be severely interrupted or delayed. If such interruption or delay were to continue for a substantial period of time, our business, prospects, financial condition and results of operations could be adversely affected.
If we lose the services of any of our key management personnel, our business could suffer.
Our future success significantly depends on the continued service and performance of our Chief Executive Officer, Paul Mathieson and our Chief Operating Officer, Carla Cholewinski. Competition for these employees is intense and we may not be able to attract and retain key personnel. We do not maintain any “key man” or other related insurance. The loss of the service of our Chief Executive Officer or our Chief Operating Officer, or the inability to attract additional qualified personnel as needed, could materially harm our business.
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We will incur increased costs as a result of being a public reporting company.
Once the registration statement, of which this prospectus forms a part, is declared effective by the SEC, we will be a public reporting company. As a public reporting company, we will incur significant legal, accounting and other expenses that we did not incur as a non-reporting company, including costs associated with our SEC reporting requirements. We expect that the additional reporting and other obligations imposed on us under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) will increase our legal and financial compliance costs and the costs of our related legal, accounting and administrative activities significantly. Management estimates that compliance with the Exchange Act reporting requirements as a reporting company will cost in excess of $150,000 annually. Given our current financial resources, these additional compliance costs could have a material adverse impact on our financial position and ability to achieve profitable results. These increased costs will require us to divert money that we could otherwise use to expand our business and achieve our strategic objectives.
We operate in a highly competitive market, and we cannot ensure that the competitive pressures we face will not have a material adverse effect on our results of operations, financial condition and liquidity.
The consumer finance industry is highly competitive. Our success depends, in large part, on our ability to originate consumer loan receivables. We compete with other consumer finance companies as well as other types of financial institutions that offer similar products and services in originating loan receivables. Some of these competitors may have greater financial, technical and marketing resources than we possess. Some competitors may also have a lower cost of funds and access to funding sources that may not be available to us. While banks and credit card companies have decreased their lending to non-prime customers in recent years, there is no assurance that such lenders will not resume those lending activities. Further, because of increased regulatory pressure on payday lenders, many of those lenders are starting to make more traditional installment consumer loans in order to reduce regulatory scrutiny of their practices, which could increase competition in markets in which we operate.
Our business is subject to extensive regulation in the jurisdictions in which we conduct our business.
Our operations are subject to regulation, supervision and licensing under various federal, state and local statutes, ordinances and regulations. In most states in which we operate, a consumer credit regulatory agency regulates and enforces laws relating to consumer lenders such as us. These rules and regulations generally provide for licensing as a consumer lender, limitations on the amount, duration and charges, including interest rates, for various categories of loans, requirements as to the form and content of finance contracts and other documentation, and restrictions on collection practices and creditors’ rights. In certain states, we are subject to periodic examination by state regulatory authorities. Some states in which we operate do not require special licensing or provide extensive regulation of our business.
We are also subject to extensive federal regulation, including the Truth in Lending Act, the Equal Credit Opportunity Act and the Fair Credit Reporting Act. These laws require us to provide certain disclosures to prospective borrowers and protect against discriminatory lending and leasing practices and unfair credit practices. The principal disclosures required under the Truth in Lending Act include the terms of repayment, the total finance charge and the annual percentage rate charged on each contract or loan. The Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, age or marital status. According to Regulation B promulgated under the Equal Credit Opportunity Act, creditors are required to make certain disclosures regarding consumer rights and advise consumers whose credit applications are not approved of the reasons for the rejection. In addition, the credit scoring system used by us must comply with the requirements for such a system as set forth in the Equal Credit Opportunity Act and Regulation B. The Fair Credit Reporting Act requires us to provide certain information to consumers whose credit applications are not approved on the basis of a report obtained from a consumer reporting agency and to respond to consumers who inquire regarding any adverse reporting submitted by us to the consumer reporting agencies. Additionally, we are subject to the Gramm-Leach-Bliley Act, which requires us to maintain the privacy of certain consumer data in our possession and to periodically communicate with consumers on privacy matters. We are also subject to the Service members Civil Relief Act, which requires us, in most circumstances, to reduce the interest rate charged to customers who have subsequently joined, enlisted, been inducted or called to active military duty.
A material failure to comply with applicable laws and regulations could result in regulatory actions, lawsuits and damage to our reputation, which could have a material adverse effect on our results of operations, financial condition and liquidity.
Our accountants have raised substantial doubt regarding our ability to continue as a going concern.
As noted in our consolidated financial statements, we had an accumulated stockholders’ deficit of approximately $9.28 million and recurring losses from operations as of December 31, 2013. We also had a working capital deficit of approximately $0.28 million as of December 31, 2013 and debt with maturities within the fiscal year 2014 in the amount of approximately $0.25 million. We intend to fund operations through raising additional capital through debt financing and equity issuances and increased lending activities which may be insufficient to fund our capital expenditures, working capital or other cash requirements for the year ending December 31, 2014. We are continuing to seek additional funds to finance our immediate and long term operations. The successful outcome of future financing activities cannot be determined at this time and there is no assurance that if achieved, we will have sufficient funds to execute our intended business plan or generate positive operating results. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The audit report of Rose, Snyder & Jacobs LLP for the fiscal years ended December 31, 2013 and 2012 contain a paragraph that emphasizes the substantial doubt as to our continuance as a going concern. This is a significant risk that we may not be able to remain operational for an indefinite period of time.
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Risks Relating to the Offering
Provisions of our articles of incorporation and bylaws may delay or prevent a take-over which may not be in the best interests of our shareholders.
Provisions of our articles of incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings of our shareholders may be called, and may delay, defer or prevent a takeover attempt. In addition, certain provisions of the Florida Business Corporations Act also may be deemed to have certain anti-takeover effects which include that control of shares acquired in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved by a majority of a corporation’s disinterested shareholders. Further, our articles of incorporation authorizes the issuance of up to 50,000,000 shares of preferred stock with such rights and preferences as may be determined from time to time by our board of directors in their sole discretion. Our board of directors may, without shareholder approval, issue series of preferred stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our common stock.
The tradability of our common stock is limited under the penny stock regulations which may cause the holders of our common stock difficulty should they wish to sell the shares.
Because the quoted price of our common stock is less than $5.00 per share, our common stock is considered a “penny stock,” and trading in our common stock is subject to the requirements of Rule 15g-9 under the Exchange Act. Under this rule, broker-dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements. The broker-dealer must make an individualized written suitability determination for the purchaser and receive the purchaser’s written consent prior to the transaction. SEC regulations also require additional disclosure in connection with any trades involving a “penny stock,” including the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and its associated risks. These requirements severely limit the liquidity of securities in the secondary market because few broker or dealers are likely to undertake these compliance activities and this limited liquidity will make it more difficult for an investor to sell his shares of our common stock in the secondary market should the investor wish to liquidate the investment. In addition to the applicability of the penny stock rules, other risks associated with trading in penny stocks could also be price fluctuations and the lack of a liquid market.
If the selling stockholders sell a substantial number of shares all at once or in large blocks, the market price of our shares would most likely decline.
The selling stockholders may offer and sell up to 172,965,945 shares of our common stock through this prospectus. Our common stock is presently quoted on the OTC Markets and any sale of shares at a price below the current market price at which the common stock is trading will cause that market price to decline. Moreover, the offer or sale of a large number of shares at any price may cause the market price to fall. We cannot predict the effect, if any, that future sales of shares of our common stock into the market will have on the market price of our common stock. Sales of substantial amounts of common stock or the perception that such transactions could occur, may materially and adversely affect prevailing markets prices for our common stock.
Trading on the OTC Markets is volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares .
Our common stock is quoted on the OTC Markets. Trading in stock quoted on the OTC Markets is often thin and characterized by wide fluctuations in trading prices, due to many factors, some of which may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Markets is not a stock exchange, and trading of securities on the OTC Markets is often more sporadic than the trading of securities listed on a quotation system like NASDAQ or a stock exchange like the New York Stock Exchange. These factors may result in investors having difficulty reselling any shares of our common stock.
Our stock price is likely to be highly volatile because of several factors, including a limited public float.
The market price of our common stock has been volatile in the past and is likely to be highly volatile in the future because there has been a relatively thin trading market for our stock, which causes trades of small blocks of stock to have a significant impact on our stock price. You may not be able to resell shares of our common stock following periods of volatility because of the market’s adverse reaction to volatility.
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Other factors that could cause such volatility may include, among other things:
● | actual or anticipated fluctuations in our operating results; | |
● | the absence of securities analysts covering us and distributing research and recommendations about us; | |
● | we may have a low trading volume for a number of reasons, including that a large portion of our stock is closely held; | |
● | overall stock market fluctuations; | |
● | announcements concerning our business or those of our competitors; | |
● | actual or perceived limitations on our ability to raise capital when we require it, and to raise such capital on favorable terms; | |
● | conditions or trends in the industry; | |
● | litigation; | |
● | changes in market valuations of other similar companies; | |
● | future sales of common stock; | |
● | departure of key personnel or failure to hire key personnel; and | |
● | general market conditions. |
Any of these factors could have a significant and adverse impact on the market price of our common stock. In addition, the stock market in general has at times experienced extreme volatility and rapid decline that has often been unrelated or disproportionate to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock, regardless of our actual operating performance.
We have never paid dividends on our common stock and have no plans to do so in the future.
Holders of shares of our common stock are entitled to receive such dividends as may be declared by our board of directors. To date, we have paid no cash dividends on our shares of common stock and we do not expect to pay cash dividends on our common stock in the foreseeable future. We intend to retain future earnings, if any, to provide funds for operations of our business. Therefore, any return investors in our common stock may have will be in the form of appreciation, if any, in the market value of their shares of common stock. See “Dividend Policy.”
We will not receive any proceeds from the sale of common stock by the selling stockholders in this offering. See “Principal and Selling Stockholders.”
DETERMINATION OF OFFERING PRICE
The prices at which the shares covered by this prospectus may actually be sold will be determined by the prevailing public market price for shares of our common stock, by negotiations between the selling stockholders and buyers of our common stock in private transactions or as otherwise described in “Plan of Distribution.”
Each selling security holder and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock covered hereby on the OTC Bulletin Board or any other stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. A selling security holder may use any one or more of the following methods when selling shares:
● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | |
● | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; | |
● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | |
● | an exchange distribution in accordance with the rules of the applicable exchange; | |
● | privately negotiated transactions; | |
● | settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part; |
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● | in transactions through broker-dealers that agree with the selling security holders to sell a specified number of such shares at a stipulated price per share; | |
● | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; | |
● | a combination of any such methods of sale; or | |
● | any other method permitted pursuant to applicable law. |
At any time after the one year anniversary from the date we filed this prospectus (which includes “Form 10” information) with the SEC, the selling security holders may also sell shares under Rule 144 under the Securities Act if available, rather than under this prospectus.
Broker-dealers engaged by the selling security holders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling security holders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.
In connection with the sale of the common stock or interests therein, the selling security holders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling security holders may also sell shares of the common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling security holders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus, as supplemented or amended to reflect such transaction.
Certain of the selling security holders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
Because certain of selling security holders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act, including Rule 172 thereunder. The resale shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale shares of common stock covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale shares may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the selling security holders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of the common stock by the selling security holders or any other person. We will make copies of this prospectus available to the selling security holders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale, including by compliance with Rule 172 under the Securities Act.
We have not paid any cash dividends on our common stock and do not currently anticipate paying cash dividends in the foreseeable future. The agreements into which we may enter in the future, including indebtedness, may impose limitations on our ability to pay dividends or make other distributions on our capital stock. Payment of future dividends on our common stock, if any, will be at the discretion of our board of directors and will depend on, among other things, our results of operations, cash requirements and surplus, financial condition, contractual restrictions and other factors that our board of directors may deem relevant. We intend to retain future earnings, if any, for reinvestment in the development and expansion of our business.
As of December 11, 2014, we had 1,000,000, 410,000, 400,025, 173,000, 461,000 and 1,400,000 shares of Series A, Series B, Series C, Series D, Series E and Series F preferred stock, respectively, issued and outstanding. Shares of Series A, Series B, Series C, Series D, Series E and Series F preferred stock accrue dividends at the rate of 12% per annum based on a stated value of $1.00 per preferred share and is paid monthly.
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Business Overview
We provide online unsecured consumer loans ranging from $2,000 to $10,000 under the consumer brand Mr. Amazing Loans via our website and online application portal at www.mramazingloans.com. We commenced business in 2010, opening our first office in Las Vegas, Nevada. We have since obtained additional state lending licenses and are currently licensed and originating direct consumer loans in the states of Nevada, Arizona, Illinois, Georgia, Missouri, Virginia, Texas, New Jersey and Florida. Loans are now provided to residents of these states via our online application and distribution network, with all loans originated, processed and serviced out of our centralized Las Vegas head office thereby eliminating the need for physical offices in the states where we are licensed to operate.
Our strategy is to address the market needs of underbanked consumers that tend to be ignored by mainstream institutional credit providers such as banks and credit unions, and charged excessive fees and interest by fringe lenders such as payday lenders. In the current global environment, we believe there is a substantial need and opportunity for the small personal loans we offer.
All of our personal loans are offered at prevailing statutory rates with fixed affordable repayments and no hidden fees or prepayment penalties. We conduct full underwriting on all applications including credit checks and review of bank statements to ensure customers have capacity to repay their loans, and have designed our loans to help customers reach a stronger financial position.
We plan to continue expanding our state coverage in late 2014 and early 2015 by obtaining state lending licenses in 16 additional states, increasing our coverage to 25 states and approximately 250 million people. As soon as we receive new state licenses we will turn on our existing online marketing and distribution channels which we expect will generate immediate business at a customer acquisition cost within our desired budget.
In addition, we plan to begin funding five-year AUD $5,000 and AUD $10,000 unsecured consumer loans in Australia in late December 2014 at 39.9% per annum APR (upon finalization of outsourced servicing contracts) via our re-launched, fully operational www.mramazingloans.com.au website with centralized marketing and funding provided from the Las Vegas office. As of the date of this prospectus, we have not provided any loans in Australia. We are also planning online expansion globally into Canada, the United Kingdom, the Philippines and India in 2015.
Market
We operate in the consumer finance industry serving the large and growing population of consumers who have limited access to credit from banks, credit card companies and other lenders. According to the Federal Deposit Insurance Corporation, there were approximately 51 million adults living in under-banked households in the United States in 2011, and one quarter of United States households had used at least one alternative financial services product in the past year. According to the Center for Financial Services Innovation’s 2011 Underbanked Market Sizing Study, the underbanked marketplace generated approximately $78 billion in fee and interest revenue in 2011 from a volume of $682 billion in principal loaned, funds transacted, deposits held and services rendered. The underbanked marketplace encompasses close to two dozen products across personal loans, vehicle loans and leases, credit cards, home equity lines of credit and student loans, and in 2011 comprised over 68 million consumers.
Installment lending to non-prime consumers is one of the most highly fragmented sectors of the consumer finance industry. We are a state-licensed Internet-based personal loan company serving in the consumer installment lending industry. Our online lending platform provides the distribution network to efficiently address this growing market of consumers without the significant costs and overhead associated with an extensive branch network. We believe we are well positioned to capitalize on the significant growth and expansion opportunity created by the continued shift of consumers to online services, such as online banking and in our case online personal loans.
Business Strategy
Our business strategy is to lower the cost of providing consumer loans by leveraging our online lending platform and distribution network, while continuing to obtain additional state licenses to enable further loan book growth and portfolio diversification. Our strategy includes a number of key elements:
● | State Licensed Model: We believe that our state-licensed business model is a major competitive advantage which distinguishes us from most competitors in the consumer lending industry such as payday lenders, fringe online lenders and tribal lenders. With increased regulatory scrutiny of the consumer finance industry from certain state regulators as well as the Consumer Financial Protection Bureau, we are well positioned to take advantage of continued regulatory pressure and legislative change in the our industry, | |
● | Online Distribution: We launched online lending and commenced online advertising in July 2013. Upon fulfillment of state regulatory requirements, we received approval from the Florida, Illinois and Arizona state regulators to operate solely online in these states. We have also received regulatory approval from our five newly licensed states, Georgia, Missouri, New Jersey, Texas and Virginia to operate solely online. This allows us to fully service all nine states from our centralized Las Vegas headquarters which we believe is a key competitive advantage over brick and mortar lenders. |
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● | Cost-Effective Customer Acquisition: Our customer acquisition costs have been reduced significantly since we launched online lending and marketing. While traditional forms of direct advertising such as radio and television typically resulted in a 10% to 15% acquisition cost, online search engine advertising has averaged 2% to 10% with continued improvements expected from our new website. | |
● | Continue to Grow Loan Book: Total cumulative loan originations as of November 28, 2014 have increased 2040% to $5,071,022 since our June 30, 2013 total of $237,000. This growth in lending is attributable to launching online lending and joint venturing with a number of new marketing partners. We also plan to obtain an additional 16 state lending licenses by early 2015. |
Competitive Strengths
We believe our competitive strengths are:
● | Large Market and Scope for Growth: Large personal and payday loan market in the United States of over $50 billion per annum presents opportunity for significant growth and expansion. | |
● | Proven Business Model: Our founder, Chairman and CEO Paul Mathieson established similar business in Australia that lent approximately $48 million to over 11,500 customers which forms the foundation of our United States business model. | |
● | Regulation: We are fully compliant with state lending licenses in Nevada, Arizona, Illinois, and Florida and are well positioned for current and future regulatory changes due to ongoing compliance and conservative business model. | |
● | Customer Proposition: Our unsecured installment loans range from $5,000 - $10,000 over five years and feature affordable weekly repayments. Rates range from 19.9% - 29.9% APR which make us a low cost alternative to payday loans which have an average APR of over 400%. | |
● | Senior Revolving Debt Facility: We have a $10 million revolving credit facility in place from a Florida based investment group BFG Investment Holdings, LLC to fund new loan originations. | |
● | Online Distribution: Special approval has been granted by the Arizona, Florida, Georgia, Illinois, Missouri, New Jersey, Texas and Virginia regulators to operate our business without a physical office location in each state. As a result we have closed offices in Arizona, Illinois and Florida and moved to full online loan distribution, enabling us to offer loans to residents in all nine of our licenses states from our Las Vegas headquarters. We will apply for the same regulatory approval for our 16 additional planned states in 2014 and 2015. | |
● | Customer Acquisition: We launched online advertising in July 2013 with positive results from search engine cost per click advertising resulting in a 2040% increase in our loan book from June 30, 2013 to November 28, 2014. In addition we have engaged a number of new marketing partners in 2014 including online lead generators and direct mail. All of these avenues provide opportunities for strong growth at low customer acquisition costs. | |
● | Barriers to Entry: We believe that state licensure acts as a barrier to entry into our segment of the consumer loan market. We are strongly positioned with approval to operate under nine state licenses from one centralized head office, and potential competitors would be required to obtain these licenses in order to compete with us. |
Products
We provide online consumer loans ranging from $5,000 - $10,000, unsecured over a five year term. Our personal loan products range from 19.9% to 29.9% interest and annual percentage rate, with exact rate and term depending on customer state of residency.
Our personal loan products are fully amortizing, fixed rate, unsecured installment loans and all loans are offered at prevailing statutory rates.
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The following is an illustrative profile of our personal loans:
Loan Product | - | Loans for $5,000 - $10,000 |
- | 5 years | |
- | $6,000 average loan amount | |
- | 28% average APR | |
- | Fixed rate, fully amortizing | |
- | No hidden or additional fees | |
- | No prepayment penalties | |
Loans available for any purpose. Common uses include: | ||
Loan Purpose | - | Debt consolidation |
- | Medical expenses | |
- | Home improvements | |
- | Auto repairs | |
- | Major purchase | |
- | Discretionary spending | |
Average Borrower Demographic | - | 625-720 credit score |
- | $35,000 - $100,000 income | |
- | 20-65 years old |
We commenced originating personal loans online in July 2013. Prior to that, we provided loans to customers via our branch network, which comprised one branch in each state as required by state licensing regulations. Our online loan origination platform now means that a qualifying customer can obtain a loan from us without having to come into a branch. We have maintained our full underwriting processes, identity verifications and fraud checks to ensure that online customers are verified to the same degree that customers were when they obtained a loan in a branch. Our new website and application portal was recently launched on www.mramazingloans.com and we expect this enhanced website with improved customer experience to be a key driver of customer conversions and loan book growth.
Customer Acquisition
Since launching online lending in July 2013, our marketing efforts have been focused on online customer acquisition. We have seen significant increases in loan applications and inquiries as a result of search engine advertising and commenced banner advertising, remarketing and search engine optimization in 2014. We have also engaged numerous online lead generators who provide personal loan leads on a daily basis. We are continuing to develop relationships with additional lead generation partners to drive further growth.
We plan to launch a customer referral program and merchant referral program in 2015 via our www.mramazingloans.com website. We will also supplement our online marketing efforts with traditional forms of advertising e.g. radio, television and direct mail offers to continue to drive further growth.
Loan Underwriting
All loan applications are fully underwritten by an underwriter and sent for secondary review approval to our Chief Credit Officer before being funded. We run a credit check on every application, and also use a number of other factors in addition to an applicant’s credit score to determine the likelihood that a prospective borrower will pay their debt. In addition, we calculate an applicant’s debt to income ratio and review their bank statements for any adverse banking habits. If an applicant does not meet our loan qualification requirements, we encourage them to reapply with a co-applicant to strengthen their application and chance of being approved for a loan.
Servicing
All of our loan servicing is handled in our centralized Las Vegas head office. All servicing and collection activity is conducted and documented using an industry standard loan service software system which handles and records all records and transactions of loan originations, loan servicing, collections and reporting.
Regulation
Consumer loans in the United States are regulated at both the federal and state level. National oversight is provided by the Federal Trade Commission, which enforces the following credit laws that protect consumers’ rights to get, use and maintain credit:
● | The Truth in Lending Act promotes the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed. | |
● | The Fair Credit Reporting Act promotes the accuracy and privacy of information in the files of the nation’s credit reporting companies. If a company denies an application, under the Fair Credit Reporting Act consumers have the right to the name and address of the credit reporting company they contacted, provided the denial was based on information given by the credit reporting company. |
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● | The Equal Opportunity Credit Act prohibits credit discrimination on the basis of sex, race, marital status, religion, national origin, age, or receipt of public assistance. Creditors may ask for this information (except religion) in certain situations, but they may not use it to discriminate against consumers when deciding whether to grant you credit. | |
● | The Fair Credit Billing Act and Electronic Fund Transfer Act establish procedures for resolving mistakes on credit billing and electronic fund transfer account statements. | |
● | The Fair Debt Collection Practices Act (the “FDCPA”) applies to personal, family, and household debts. The FDCPA prohibits debt collectors from engaging in unfair, deceptive, or abusive practices while collecting these debts. |
Consumer loans are also regulated at State level, and the regulatory requirements vary between states. We are licensed in the following states:
● | Arizona (Consumer Lender License, No. CL0918180, which commenced on May 20, 2011) | |
● | Florida (Consumer Finance Company License, No. CF9900865, which commenced on August 29, 2011) | |
● | Georgia (State Business License, No. 14021183, which commenced on March 4, 2013) | |
● | Illinois (Consumer Instalment Loan License, No. CI3095, which commenced on April 13, 2011) | |
● | Missouri (Consumer Instalment Loan License, No. 510-15-7308, which commenced on April 7, 2014) | |
● | Nevada (Installment Loan License, No. II22748, which commenced on June 15, 2010) | |
● | New Jersey (Consumer Lender License, No. L066960, which commenced on April 24, 2014) | |
● | Texas (Regulated Lender License, No. 1400031843-150319, which commenced on November 14, 2014) | |
● | Virginia (State Business License, No. CIS0368, which commenced on March 5, 2014) |
We did not incur any costs in connection with the compliance with any federal, state, or local environmental laws.
Competition
We operate in a highly competitive environment. Several personal consumer loan companies operate in the United States. Our competitors include:
● | large, publicly-traded, state-licensed personal loan companies, | |
● | peer-to-peer lending companies, such as Lending Club and Prosper, | |
● | recent startup state-licensed personal loan companies, such as Avant Credit, | |
● | “brick and mortar” personal loan companies, including those that have implemented websites to facilitate online lending, and | |
● | payday lenders, tribal lenders and other online consumer loan companies. |
We believe we compete based on affordable repayment terms, favorable interest rates, significant financial resources from our revolving debt facility, low overhead due to on-line distribution. We believe that in the future we will face increased competition from these companies as we expand our operations. Most of the entities against which we compete, or may compete, are larger and have greater financial resources than us. No assurance can be given that increased competition will not have an adverse effect on our company.
Office Locations
Our executive offices, which also serve as our centralized operational headquarters and Nevada branch, are located at 6160 West Tropicana Ave, Suite E-13, Las Vegas, Nevada 89103. This facility occupies a total of approximately 2,125 square feet under a lease that expires in April 2015. Our annual rental for this facility is approximately $46,750 in the first year of the lease up to $56,215 in the final year of the term of the lease, plus a proportionate share of operating expenses of approximately $12,112 annually. We believe this facility is adequate for our current and near term future needs due to our online strategy.
We lease approximately 1,200 square feet in Chicago, Illinois under a lease expiring in July 2016. Our annual rental for this office is approximately $33,000 plus a proportionate share of operating expenses. We subleased this office in September 2014 for $19,200 annually and will continue to pay the remaining rent until expiration of the lease.
We lease approximately 1,400 square feet in Phoenix, Arizona under a lease expiring in April 2016. Our annual rental for this office is approximately $24,000, plus a proportionate share of operating expenses.
We lease approximately 4,024 square feet in West Palm Beach, Florida under a lease expiring in August 2016. Our annual rental for this office is approximately $96,000, plus a proportionate share of operating expenses.
We no longer use the offices located in Phoenix and West Palm Beach and we are currently attempting to sublease them.
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Employees
As of November 19, 2014, we had five full-time employees and eight part-time employees. None of our employees is represented by a union.
Corporate History
We were organized as a Florida corporation on January 21, 1999, under the name Interact Technologies, Inc. and previously operated under the names Fairhaven Technologies, Inc. and Ideal Accents, Inc. We changed our name to IEG Holdings Corporation in February 2013. Since March 2013, we have been engaged in the business of providing unsecured consumer loans ranging from $2,000 - $10,000 and offer loans online under the consumer brand “Mr. Amazing Loans”. The Company is headquartered in Las Vegas, Nevada and originates direct consumer loans in the states of Arizona, Florida, Georgia, Illinois, Missouri, New Jersey, Texas and Virginia via its website and online distribution network. The Company is a fully licensed consumer installment loan provider in the nine states in which it operates and offers all loans within the prevailing statutory rates.
On January 25, 2013, Investment Evolution Global Corporation (“IEGC”) entered into a stock exchange agreement (the “Stock Exchange Agreement”) among IEGC, its sole shareholder IEG Holdings Limited, an Australian company (“IEG”) and our company. Under the terms of the Stock Exchange Agreement, we agreed to acquire a 100% interest in IEGC for 272,447,137 shares of our common stock after giving effect to a 1-for-6 reverse stock split. On February 14, 2013 we filed the Amended Articles with the Secretary of State of Florida changing our name from Ideal Accents, Inc. to IEG Holdings Corporation, increasing the number of shares of our authorized common stock to 1,000,000,000, $.001 par value, creation of 50,000,000 shares of “blank-check” preferred stock and effectuating a 1-for-6 reverse stock split of our issued and outstanding common stock (the “Reverse Stock Split”) pursuant to the terms of the Stock Exchange Agreement. FINRA approved our Amended Articles on March 11, 2013.
On March 13, 2013, we completed the acquisition of IEGC under the terms of the Stock Exchange Agreement and issued to IEG 272,447,137 shares of our common stock after giving effect to the Reverse Stock Split whereby we acquired a 100% interest in IEGC. As a result of the ownership interests of IEG in our company and its former ownership interest in IEGC, for financial statement reporting purposes, our acquisition of IEGC has been treated as a reverse acquisition with the IEGC being the accounting acquirer.
Legal Proceedings
We are not a party to any pending or threatened litigation.
MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
Our common stock is currently quoted on the OTC Markets. The OTC Market is a network of security dealers who buy and sell stock. The dealers are connected by a computer network that provides information on current “bids” and “asks”, as well as volume information. Since March 11, 2013, our shares have been quoted on the OTC Markets under the symbol “IEGH.”
The following table sets forth the range of high and low closing bid quotations for our common stock for each of the periods indicated as reported by the OTC Markets. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. As of February 22, 2013, we effected a 1-for-6 reverse stock split. All prices in the following table reflect post-reverse split prices.
Fiscal Year Ended December 31, 2013
High Bid | Low Bid | |||||||
Fiscal Quarter Ended: | ||||||||
March 31, 2013 | $ | 0.05 | $ | 0.02 | ||||
June 30, 2013 | $ | 0.12 | $ | 0.02 | ||||
September 30, 2013 | $ | 0.10 | $ | 0.10 | ||||
December 31, 2013 | $ | 0.15 | $ | 0.10 |
On December 8, 2014, the closing price for our common stock on the OTC Markets was $1.00 per share.
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Holders of Common Stock
As of December 11, 2014, there were approximately 2,351 record holders of our common stock. The number of record holders does not include beneficial owners of common stock whose shares are held in the names of banks, brokers, nominees or other fiduciaries.
We have no securities authorized for issuance under equity compensation plans.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes to those financial statements that are included elsewhere in this prospectus. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this prospectus. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.
Overview
We are a consumer finance company providing responsible online personal loan products to customers in nine states via our website and online application portal. We have a four year track record of high quality origination, underwriting and servicing of personal loans to underbanked consumers. We leverage our experience and knowledge in the consumer finance industry to achieve a meaningful return on our investment in the loan portfolio.
We have the ability to finance our businesses from a diversified source of capital and funding, including cash flow from operations and financings in the capital markets. Earlier this year we demonstrated the ability to attract capital markets funding for our core personal loans by completing private placements of common stock and preferred stock that generated $5,379,485 investment into the Company.
As of September 30, 2014, we had one business segment: Consumer Loans.
Our Products and Services
We provide unsecured loans to individuals. Our loans range from $5,000-$10,000 with 19.9%-29.9% APR and all are unsecured over a five-year term.
Results of Operations
Interest Revenue
For the nine months ended September 30, 2014 interest revenue increased to $237,519 compared to $35,024 for the nine months ended September 30, 2013. The increase in interest revenue is attributable to the corresponding growth in our interest-earning loan book of consumer receivables. We expect our interest revenue to grow significantly in future periods as we continue to grow our loan book.
Other Revenue
For the nine months ended September 30, 2014 other revenue decreased to $2,313 compared to $3,429 for the nine months ended September 30, 2013. Other revenue consists of application fees, late/dishonor fees, prepayment penalties and other miscellaneous income. The reduction in other revenue is attributable to application fees and prepayment penalties, with the $25 fee previously charged for all loan applications and prepayment penalties ceasing in November 2013. We stopped charging the $25 application fee and prepayment penalties because we wanted to provide a straightforward and completely transparent product to the consumer, with no additional fees or costs on our loans other than the interest rate charged.
Rent Expense
For the nine months ended September 30, 2014 rent decreased to $192,189 compared to $208,412 for the nine months ended September 30, 2013. The reduction in rent is due to a corporate apartment which was leased in 2013 no longer being leased in 2014. We expect rental expense to reduce further in future periods as we are able to sublease our unused offices in Florida, Arizona, and Illinois and as leases expire.
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Consulting Fees
For the nine months ended September 30, 2014 consulting fees increased to $708,023 compared to $159,428 for the nine months ended September 30, 2013. The increase was primarily due to one-off capital raising fees resulting from the significant capital raised during the period for common and preferred shares, including multiple investor presentations and the extensive work involved in handling queries from over 500 individual investors.
General and Administrative Expenses
For the nine months ended September 30, 2014 general and administrative expenses increased to $322,638 compared to $98,744 for the nine months ended September 30, 2013. The increase was attributable to the higher costs associated with a significantly higher volume of loan applications to process and larger loan book to service.
Professional Fees
For the nine months ended September 30, 2014 professional fees increased to $128,942 compared to $65,674 for the nine months ended September 30, 2013. The increase was due to stock issue expenses in the period which were not incurred in the prior period, as well as increased audit and legal fees.
Telephone and Utilities Expenses
For the nine months ended September 30, 2014 telephone and utilities expenses increased to $81,082 compared to $70,890 for the nine months ended September 30, 2013. The increase was due to the higher volume of applications processed, with each online application typically requiring multiple phone calls during the underwriting process to collect required documentation for underwriting, verify information and check references.
Marketing Expenses
For the nine months ended September 30, 2014 marketing expenses increased to $288,539 compared to $59,159 for the nine months ended September 30, 2013. This increase is attributable to the significant increase in customer acquisition costs incurred to grow the loan book, including online advertising, direct mail, and lead generation costs.
Travel Expenses
For the nine months ended September 30, 2014 travel expenses increased to $285,930 compared to $36,606 for the nine months ended September 30, 2013. Travel expenses include corporate travel for meetings and investor presentations, as well as other investor-related expenses. The increase is also attributable to a number of older staff travel expenses related to capital raisings submitted for reimbursement and booked in this period.
Depreciation and Amortization Expenses
For the nine months ended September 30, 2014, depreciation and amortization expenses increased to $68,803 compared to $32,719 for the nine months ended September 30, 2013. The increase in depreciation and amortization was due to assets related to our closed offices being written off in 2014.
Provision for Credit Losses
For the nine months ended September 30, 2014 the provision for credit losses increased to $344,558 compared to $31,786 for the nine months ended September 30, 2013. We carry a provision for credit losses which is estimated based on our loan portfolio and general economic conditions. The increase in provision for credit losses from prior year was due to the significantly larger loans receivable outstanding balance of $2,849,114 at September 30, 2014 compared to loans receivable outstanding of $254,572 at September 30, 2013.
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Insurance Expense
For the nine months ended September 30, 2014 insurance expense decreased to $10,188 compared to $21,255 for the nine months ended September 30, 2013. The decrease was due to the removal of ongoing health insurance expense for our CEO, as well as reduced general liability insurance expenses for closed office locations in Florida, Illinois and Arizona.
Licenses and Taxes Expenses
For the nine months ended September 30, 2014 licenses and taxes expenses increased to $43,461 compared to $10,679 for the nine months ended September 30, 2013. The increase was attributable to higher payroll tax and also the company expanding to five additional states of Georgia, Virginia, Missouri, Texas and New Jersey, as well as the costs associated with submitting a further five state license applications in the period. We anticipate further increases in licenses and tax expenses as we continue expansion of consumer lending into more states.
Office and Miscellaneous Expenses
For the nine months ended September 30, 2014 office and miscellaneous expenses increased to $15,700 compared to $10,281 for the nine months ended September 30, 2013. The increase was due to significant increase in applications processed and loans to service.
Repairs Expenses
For the nine months ended September 30, 2014 repairs expenses increased to $6,317 compared to $5,174 for the nine months ended September 30, 2013. The increase was due to timing of required repairs.
Startup Costs
For the nine months ended September 30, 2014 startup costs decreased to $0 compared to $1,500,000 for the nine months ended September 30, 2013. The decrease was due to the startup costs in prior period being one-off costs incurred for the purchase of Australian rights to conduct business throughout Australia.
Interest Expense
For the nine months ended September 30, 2014 interest expense increased to $334,666 compared to $143,726 for the nine months ended September 30, 2013. The increase was attributable to increased interest cost for BFG Loan Holdings, LLC $10 million revolving debt facility and 12% yield paid on deposits on preferred stock. We expect further increase in interest expenses as we continue to grow our loan book via debt financing.
Other Expenses
For the nine months ended September 30, 2014 other expenses increased to $62,196 compared to $0 for the nine months ended September 30, 2013. The increase was primarily attributable to older staff expenses related to prior year capital raising being submitted for reimbursement and booked in this period.
Financial Position
Cash and Cash Equivalents
We had cash and cash equivalents of $2,367,308 as of September 30, 2014 as compared to $281,879 as of December 31, 2013. The increase was due to capital raised by the company, with $2,319,528 raised from an entitlement offering of common shares to existing shareholders at $0.01, $0.015 and $0.02 per share, and a further $1,311,073 in deposits on preferred stock at September 30 2014.
Loans Receivable
We had net loan receivables of $2,490,695 as of September 30, 2014 as compared to $426,113 as of December 31, 2013. We plan to continue rapidly expanding our loans receivable in future periods.
Property and Equipment
Our net property and equipment had decreased from $43,349 as of December 31, 2013 to $34,465 as of September 30, 2014 due to depreciation of existing assets and minimal fixed asset additions in 2014.
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Loan Costs
Our net loan costs had decreased from $131,470 as of December 31, 2013 to $91,203 as of September 30, 2014 due to impairment of capitalized loan costs.
Accounts Payable and Accrued Expenses
We had accounts payable and accrued expenses of $152,323 as of September 30, 2014 as compared to $323,798 as of December 31, 2013. The decrease is due to amounts paid down during the nine months ended September 30, 2014.
Working Capital Loans
We had working capital loans of $140,000 as of December 31, 2013 which were paid down to $0 as of September 30, 2014.
Senior Debt
We had senior debt of $2,230,000 as of September 30, 2014 as compared to $500,000 as of December 31, 2013. This senior debt comprises advances from our $10 million revolving facility and we will continue to draw down debt to fund loans to consumers and expand our loan book.
Deposit on Preferred Stock
We had deposit on preferred stock of $1,311,073 as of September 30, 2014 as compared to $1,910,774 as of December 31, 2013. The $1,910,774 was issued as Series A, B, C, and D preferred shares on March 31, 2014, and the $1,311,073 at September 30, 2014 comprises additional money received for Series E and F preferred shares which were both issued on November 19, 2014.
Financial Condition, Liquidity and Capital Resources
We continue to incur operating expenses in excess of net revenue and will require capital infusions to sustain our operations until operating results improve. We may not be able to obtain such capital in a timely manner and as a result may incur liquidity imbalances.
Liquidity and Capital Resources
Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash.
We used cash in operations of $2,639,399 during the nine months ended September 30, 2014 compared to $1,145,285 during the nine months ended September 30, 2013. The increase corresponds with the significant increase in loan volume and associated costs, with $2,587,016 loans originated in the nine months ended September 30, 2014 as compared to $155,008 for the same period in 2013.
We used net cash from investing activities of $2,838,994 during the nine months ended September 30, 2014 compared to $811,341 during the nine months ended September 30, 2013. The increase in cash used in investing activities is due to loans originated in the nine months ended September 30, 2014.
We were provided $7,563,822 from financing activities during the nine months ended September 30, 2014 compared to $1,912,604 during the nine months ended September 30, 2013. The increase was primarily due to a combination of proceeds from issuance of common stock of $4,455,650, deposits on preferred stock of $1,170,061 and proceeds from long-term debt of $1,730,000 for the nine months ended September 30, 2014.
At September 30, 2014 we had cash on hand of $2,367,608 which due to our continued growth plans is not sufficient to meet our operating needs for the next twelve months. We plan to continue to raise the required capital to meet our operating needs via equity, preferred stock, and debt capital raisings.
Year ending December 31, 2013 compared to the year ending December 31, 2012
Interest Revenue
For the year ended December 31, 2013, interest revenue increased to $56,585, compared to $28,950 for the year ended December 31, 2012. This increase was due to the increase in our interest-earning loan book of consumer receivables.
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Salaries and Wages Expenses
For the year ended December 31, 2013, salaries and wages expenses decreased to $1,345,243, compared to $1,680,264 for the year ended December 31, 2012. This decrease was due to a reduction of staff in 2013 when approval was received to operate solely online in Florida, Arizona and Illinois and office staff in these states were no longer required.
Consulting Fees
For the year ended December 31, 2013, consulting fees increased to $462,771, compared to $64,923 for the year ended December 31, 2012. This increase was primarily attributable by capital raising and international expansion consulting fees shifting to be recorded under the U.S. company post-purchase of the Australian rights in June 2013.
Rent Expense
For the year ended December 31, 2013, rent expense increased to $290,985, compared to $215,856 for the year ended December 31, 2012. This increase was mainly attributable to the Florida lease payments commencing in May 2012.
General and Administrative Expenses
For the year ended December 31, 2013, general and administrative expenses increased to $277,165, compared to $114,455 for the year ended December 31, 2012. This increase was attributable to the growth of the business and associated costs with processing an increased number of applications and servicing a larger loan book.
Utilities
For the year ended December 31, 2013, utilities expenses increased to $129,225, compared to $76,202 for the year ended December 31, 2012. This increase was attributable to the growth of the business and associated costs with processing an increased number of applications and servicing a larger loan book.
Professional Fees
For the year ended December 31, 2013, professional fees increased to $100,924, compared to $21,687 for the year ended December 31, 2012. This increase was attributable to legal costs for advice on reverse merger and audit fees.
Marketing and Travel Expenses
For the year ended December 31, 2013, marketing and travel expenses decreased to $79,964, compared to $127,906 for the year ended December 31, 2012. This decrease was due to a reduction in travel expenses caused by the Company’s closing of the Florida, Arizona and Illinois offices in 2013.
Provision for Credit Losses
For the year ended December 31, 2013, the provision for credit losses increased to $63,492, compared to $20,340 for the year ended December 31, 2012. This movement was in line with the increase in loan originations.
Depreciation and Amortization
For the year ended December 31, 2013, depreciation and amortization decreased to $36,885, compared to $81,664 for the year ended December 31, 2012. This decrease was due to reduced value of assets and intangible assets with minimal additions during the period.
Insurance Expense
For the year ended December 31, 2013, insurance expense decreased to $24,823, compared to $51,364 for the year ended December 31, 2012. The decrease was due to a significant reduction in our health insurance expense from 2012 to 2013, with our Florida, Illinois and Arizona offices closing and employees in these states terminated as we moved to a centralized head office in Las Vegas. Workers compensation insurance was also discontinued in all states except Nevada.
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Office and Miscellaneous Expenses
For the year ended December 31, 2013, office and miscellaneous expenses decreased to $15,350, compared to $17,790 for the year ended December 31, 2012. This marginal decrease was due to business needs and timing of expenses.
Licenses and Taxes Expenses
For the year ended December 31, 2013, license and taxes expenses increased to $13,066, compared to $11,542 for the year ended December 31, 2012. This increase was due to additional applications submitted for new licenses in 2013.
Repairs Expenses
For the year ended December 31, 2013, repairs expense decreased to $5,646, compared to $10,327 for the year ended December 31, 2012. This decrease was due to timing of required repairs.
Startup Costs
For the year ended December 31, 2013, one-off startup costs were incurred for the purchase of Australian rights to conduct business throughout Australia.
Interest Expense
For the year ended December 31, 2013, interest expense increased to $195,895, compared to $51,109 for the year ended December 31, 2012. This increase was attributable to increased interest cost for the BFG Loan Holdings, LLC $10 million revolving debt facility and interest paid on working capital loans.
Financial Position
Cash and Cash Equivalents
We had cash and cash equivalents of $281,879 as of December 31, 2013, as compared to $178,601 as of December 31, 2012. The increase was related to deposits on preferred stock and timing of drawdown from $10 million debt facility.
Loans Receivable
We had net loan receivables of $426,113 as of December 31, 2013, as compared to $130,486 as of December 31, 2012. The increase was due to our growth in loan originations in 2013.
Property and Equipment
Our net property and equipment decreased from $80,235 as of December 31, 2012 to $43,349 as of December 31, 2013 due to depreciation of existing assets and minimal fixed asset additions in 2013.
Loan Costs
Our net loan costs decreased from $164,301 as of December 31, 2012 to $131,470 as of December 31, 2013 due to amortization of capitalized loan costs.
Accounts Payable and Accrued Expenses
We had accounts payable and accrued expenses of $323,798 as of December 31, 2013, as compared to $157,504 as of December 31, 2012. The increase is primarily attributable to higher accruals in 2013 for capital raising and consulting fees.
Working Capital Loans
We had working capital loans of $140,000 as of December 31, 2013, as compared to $0 as of December 31, 2012. The working capital loans were secured in 2013 to enable continued growth while capital raisings were being completed.
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Senior Debt
We had senior debt of $500,000 as of December 31, 2013, as compared to $250,000 as of December 31, 2012. This senior debt comprises advances from our $10 million revolving facility and the increase is due to additional funds drawn down from facility to fund loan book growth.
Deposit on Preferred Stock
We had deposit on preferred stock of $1,910,774 as of December 31, 2013, as compared to $0 as of December 31, 2012. The increase is due to investment funds received from capital raising for preferred stock conducted in 2013 which were not issued until March 2014.
Financial Condition, Liquidity and Capital Resources
We continue to incur operating expenses in excess of net revenue and will require capital infusions to sustain our operations until operating results improve. We may not be able to obtain such capital in a timely manner and as a result may incur liquidity imbalances.
Liquidity and Capital Resources
We used cash in operations of $1,522,805 during the year ended December 31, 2013, compared to $1,591,313 during the year ended December 31, 2012.
We used net cash from investing activities of $1,593,541 during the year ended December 31, 2013, compared to $316,717 during the year ended December 31, 2012. The increase in cash used in investing activities is primarily due to advances to our former Australian parent company, IEG Holdings Limited, of $966,620 and an increase in loans receivable originated from $126,000 in 2012 to $403,000 in 2013.
We were provided $3,219,624 of net cash from financing activities during the year ended December 31, 2013, compared to $1,943,380 during the same period in 2012. The increase is due to the significant capital raisings conducted in 2013, which brought in $1,892,861 as proceeds from issuance of common stock, $936,763 as deposit on preferred stock, and $500,000 in working capital loans.
At December 31, 2013, we had cash on hand of $281,879, which is not sufficient to meet our operating needs for the next 12 months. We plan to continue to raise the required capital to meet our operating needs via equity, preferred stock, and debt capital raisings.
The Company has a credit facility that provides for borrowings of up to $10 million with $2,230,000 and $500,000 outstanding at September 30, 2014 and December 31, 2013, respectively, subject to a borrowing base formula. The Company may borrow, at its option, at the rate of 18% with a minimum advance of $25,000. As of September 30, 2014, the Company’s effective interest rate was 18% and the unused amount available under the credit line was $7.77 million. Proceeds from this credit facility are used to fund loans to consumers. The credit facility revolving period, during which interest only payments are due, was extended on September 30, 2014 under an amendment to the loan agreement. Upon conversion to a term loan, monthly principal and interest payments equal to 100% of the consumer loan proceeds will be due. This note matures on June 1, 2016.
Substantially all of the Company’s assets are pledged as collateral for borrowings under the revolving credit agreement.
Off-Balance Sheet Arrangements
As of the date of this prospectus, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.
Going Concern
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has reported recurring losses and has not generated positive net cash flows from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management intends to raise capital funding sufficient to continue operations through January 2016 via a private or public offering of equity. This additional working capital will enable the Company to increase loan volume utilizing its existing $10 million credit facility. If the Company is not successful in raising sufficient capital, it may have to delay or reduce expenses, or curtail operations. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that could result should the Company not continue as a going concern.
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Critical Accounting Policies and Estimates
Our analysis and discussion of our financial condition and results of operations is based upon our Consolidated Financial Statements that have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. GAAP provides the framework from which to make these estimates, assumptions and disclosures. We have chosen accounting policies within GAAP that we believe are appropriate to accurately and fairly report our operating results and financial position in a consistent manner. We regularly assess these policies in light of current and forecasted economic conditions. Our accounting policies are described in Note 1 to the Consolidated Financial Statements included elsewhere in this prospectus.
Recent Accounting Pronouncements
The recent accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.
Prior to engaging Rose, Snyder & Jacobs LLP as our independent registered public accounting firm, we did not, and our predecessor did not, have an independent registered public accounting firm to audit our or our predecessor’s financial statements.
On February 21, 2013, our board of directors appointed Rose, Snyder & Jacobs LLP as our independent registered public accounting firm. Rose, Snyder & Jacobs LLP audited our financial statements for the fiscal years ended December 31, 2013 and 2012 and has been engaged as our independent registered public accounting firm for our fiscal year ending December 31, 2014. During our two most recent fiscal years and through the date of Rose, Snyder & Jacobs LLP’s appointment, we did not consult with Rose, Snyder & Jacobs LLP with respect to any of the matters or reportable events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.
DIRECTORS AND EXECUTIVE OFFICERS
Board of Directors and Executive Officers
The following table sets forth the names, positions and ages of our directors and executive officers as of the date of this prospectus. Our directors are typically elected at each annual meeting and serve for one year and until their successors are elected and qualify. Officers are elected by our board of directors and their terms of office are at the discretion of our board.
Name | Age | Position(s) | ||
Paul Mathieson | 39 | Chief Executive Officer & Director | ||
Carla Cholewinski | 60 | Chief Operating Officer and Chief Credit Officer |
Paul Mathieson. Mr. Mathieson has served as the Chief Executive Officer and member of our board of directors since 2012 and a member of the board of directors of our subsidiary since 2009. In 2005, Mr. Mathieson founded IEG Holdings Limited in Sydney, Australia which launched the Mr. Amazing Loans business. In recognition of IEG Holdings Limited’s success, Mr. Mathieson was awarded Ernst & Young’s 2007 Australian Young Entrepreneur of the Year (Eastern Region). Mr. Mathieson has over 19 years finance industry experience in lending, funds management, stock market research and investment banking. His career has included positions as Financial Analyst/Institutional Dealer with Daiwa Securities from 1995 to 1995, Head of Research for Hogan & Partners from 1995 to 2000, and Stockbroker and Investment Banking Associate with ING Barings from 2000 to 2001. In addition, from 2002 to 2010, Mr. Mathieson was the Founder and Managing Director of IE Portfolio Warrants, a funds management business that offered high return and leveraged structured Australian equities products. Mr. Mathieson received a Bachelor of Commerce from Bond University, Queensland, Australia in 1994 and a Master’s Degree of Applied Finance from Macquarie University, New South Wales, Australia in 2000.
Carla Cholewinski. Ms. Cholewinski has served as our Chief Operating Officer since 2008 and has over 37 years’ experience in the finance industry including banking, credit union management, regulatory oversight, debt securitization and underwriting. Her career has included positions as Vice President and Branch Manager at Glendale Federal Bank from 1976 to 1986, Vice President and District Sales and Lending Manager with California Federal Bank from 1986 to 1992, Mortgage Banker with First Choice Financial Services from 1992 to 1995, Corporate Vice President of Lending and Collections with WesStar Credit Union from 1995 to 1999, Chief Lending Officer for American Corp & Funding from 1999 to 2000, Chief Credit Officer for Security State Savings Bank from 2000 to 2004, and Chief Credit Officer for Fifth Street Bank from 2004 to 2008. Since 2008, Ms. Cholewinski has served as our Chief Operating Officer and Chief Credit Officer and has utilized her extensive finance, banking and regulatory experience to grow the business from initial launch to our current level of operations.
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There are no family relationships between any of the executive officers and directors. Each director is elected at our annual meeting of shareholders and holds office until the next annual meeting of shareholders, or until his successor is elected and qualified.
Director Qualifications, Committees of our Board of Directors and the Role of our Board in Risk Oversight
Director Qualifications
Mr. Mathieson was appointed to our board in March 2013 following the reverse merger with IEGC described in this prospectus. Given his role in the founding and/or operations of IEGC, we believe he remains a good fit for our current needs. Mr. Mathieson has significant operational experience in our industry and brings both a practical understanding of the industry and as well as hands-on experience in our business sector to our board and a greater understanding of certain of the challenges we face in executing our growth strategy.
Mr. Mathieson serves as both our Chief Executive Officer and the sole member of our board of directors. We do not have any independent directors. The business and operations of our company are managed by our board as a whole, including oversight of various risks, such as operational and liquidity risks that our company faces. As our company grows, we expect to expand our board of directors to include independent directors.
Committees of Our Board of Directors
We have not established any committees of comprised of members of our board of directors, including an Audit Committee, a Compensation Committee or a Nominating Committee, any committee performing a similar function. The functions of those committees are being undertaken by board of directors as a whole. Because none of our directors are considered independent, we believe that the establishment of these committees would be more form over substance. We do not have a policy regarding the consideration of any director candidates which may be recommended by our shareholders, including the minimum qualifications for director candidates, nor has our board of directors established a process for identifying and evaluating director nominees, nor do we have a policy regarding director diversity. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our shareholders, including the procedures to be followed. Our board has not considered or adopted any of these policies as we have never received a recommendation from any shareholder for any candidate to serve on our board of directors. Given our relative size, we do not anticipate that any of our shareholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our board will participate in the consideration of director nominees. In considering a director nominee, it is likely that our board will consider the professional and/or educational background of any nominee with a view towards how this person might bring a different viewpoint or experience to our board.
Our securities are not quoted on an exchange that has requirements that a majority of our board members be independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our board of directors include “independent” directors, nor are we required to establish or maintain an Audit Committee or other committee of our board of directors.
Board Oversight in Risk Management
Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including liquidity risk, operational risk, strategic risk and reputation risk. Our Chief Executive Officer also serves as one of our directors and we do not have a lead director. In the context of risk oversight, at the present stage of our operations we believe that our selection of one person to serve in both positions provides the board with additional perspective which combines the operational experience of a member of management with the oversight focus of a member of the board. The business and operations of our company are managed by our board as a whole, including oversight of various risks that our company faces. Because the majority of our board is comprised of members of our management, these individuals are responsible for both the day-to-day management of the risks we face as well as the responsibility for the oversight of risk management.
Code of Ethics and Business Conduct
Prior to effectiveness of the registration statement of which this prospectus forms a part, we will adopt a Code of Business Conduct and Ethics that applies to our board of directors, our executive officers and our employees. We expect that a copy of the Code of Business Conduct and Ethics will be available on our corporate website at www.investmentevolution.com, and that any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, will be disclosed on our website and reported to the SEC, as may be required.
27 |
Director Compensation
We have not established standard compensation arrangements for our directors and the compensation payable to each individual for their service on our board is determined from time to time by our board of directors based upon the amount of time expended by each of the directors on our behalf. Currently, the sole member of the board of directors do not receive any compensation for his services as a director.
Director Independence
The sole member of our directors is not considered “independent” within the meaning of meaning of Rule 5605 of the NASDAQ Marketplace Rules.
The following table summarizes all compensation recorded by us, including IEGH, in the past two years for:
● | our principal executive officer or other individual serving in a similar capacity, | |
● | our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers at December 31, 2013 as that term is defined under Rule 3b-7 of the Securities Exchange Act of 1934, and | |
● | up to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving as an executive officer at December 31, 2013. |
For definitional purposes, these individuals are sometimes referred to as the “named executive officers.”
2013 SUMMARY COMPENSATION TABLE
Name and Principal Position | Year |
Salary
($) |
Bonus
($) |
Stock
Awards ($) |
Option
Awards ($) |
Non-Equity
Incentive Plan Compensation ($) |
Non-Qualified
Deferred Compensation Earnings ($) |
All
Other
Compensation ($) |
Total
($) |
|||||||||||||||||||||
Paul Mathieson, | 2013 | 1,000,000 | 0 | 0 | 0 | 0 | 0 | 0 | 1,000,000 | |||||||||||||||||||||
Chief Executive Officer (1) | 2012 | 1,000,000 | 0 | 0 | 0 | 0 | 0 | 0 | 1,000,000 | |||||||||||||||||||||
Carla Cholewinski, | 2013 | 200,000 | 10,000 | 0 | 0 | 0 | 0 | 0 | 210,000 | |||||||||||||||||||||
Chief Operating Officer and Chief Credit Officer | 2012 | 200,000 | 10,000 | 0 | 0 | 0 | 0 | 0 | 210,000 |
(1) | Mr. Mathieson was appointed our Chief Executive Officer in March 2013. |
Compensation of Management
We have not entered into employment agreements with any of our executive officers. As business develops, we may enter into employment arrangements with our management personnel, on such terms as determined by our board of directors.
Outstanding Equity Awards at 2013 Fiscal Year-End
The following table provides information concerning unexercised options, stock that has not vested and equity incentive plan awards for each named executive officer outstanding as of December 31, 2013:
OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||
Name |
Number
of
Securities Underlying Unexercised Options (#) Exercisable |
Number
of
Securities Underlying Unexercised Options (#) Unexercisable |
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option
Exercise Price ($) |
Option
Expiration Date |
Number
of Shares or Units of Stock That Have Not Vested
(#) |
Market
Value of Shares or Units of Stock That Have Not Vested
($) |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested
(#) |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
(#) |
|||||||||||||||||||||||||||
Paul Mathieson | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Carla Cholewinski, | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
28 |
Limitation on Liability
The Florida Business Corporation Act permits the indemnification of directors, employees, officers and agents of Florida corporations. Our articles of incorporation and bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by the Florida Business Corporation Act.
The provisions of the Florida Business Corporation Act that authorize indemnification do not eliminate the duty of care of a director, and in appropriate circumstances equitable remedies such as injunctive or other forms of non-monetary relief will remain available under Florida law. In addition, each director will continue to be subject to liability for:
● | violations of criminal laws, unless the director had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe his conduct was unlawful, | |
● | deriving an improper personal benefit from a transaction, | |
● | voting for or assenting to an unlawful distribution, and | |
● | willful misconduct or conscious disregard for our best interests in a proceeding by or in the right of a shareholder. |
The statute does not affect a director’s responsibilities under any other law, such as the Federal securities laws. The effect of the foregoing is to require our company to indemnify our officers and directors for any claim arising against such persons in their official capacities if such person acted in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Insofar as the limitation of, or indemnification for, liabilities arising under the Securities Act may be permitted to directors, officers, or persons controlling us pursuant to the foregoing, or otherwise, we have been advised that, in the opinion of the SEC, such limitation or indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Deferred salary to our Chief Executive Officer totaling $975,484 was offset against issuance of shares of common stock during the nine months ended September 30, 2014. Advance to officer was also offset against wages and accrued expenses paid on behalf of the Company, for a total of $526,305.
Effective June 30, 2013, the Company entered into a Rights Sales Agreement, under which the Company acquired the Australian rights to conduct business throughout Australia, from IEG Holdings Limited ACN 131 987 838, its parent (until its shares were distributed to the ultimate shareholders of IEG Holdings Limited ACN 131 987 838). The purchase price for the Rights Sales Agreement was $1,500,000 which was paid as follows:
Paid through advances to (payments to third parties made on behalf of) IEG Holdings Limited ACN 131 987 838 | $ | 1,074,937 | ||
Offset amounts owed from Company shareholders who are also creditors of IEG Holdings Limited ACN 131 987 838 | $ | 425,063 |
PRINCIPAL AND SELLING STOCKHOLDERS
At December 11, 2014 we had 1,872,598,662 shares of our common stock issued and outstanding. The following table sets forth information regarding the beneficial ownership of our common stock as of December 11, 2014, and as adjusted to reflect the sale of common stock offered by the selling stockholders in this offering, for:
● | each of our named executive officers, | |
● | each of our directors, | |
● | all of our directors and executive officers as a group, | |
● | each stockholder known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock, and | |
● | all selling stockholders. |
Information on beneficial ownership of securities is based upon a record list of our shareholders and we have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws. Unless otherwise indicated in the footnotes below, based on the information provided to us by or on behalf of the selling stockholders, no selling stockholder is a broker-dealer or an affiliate of a broker-dealer.
All of the securities owned by the selling security holders may be offered hereby. The selling security holders may sell some or all of the securities owned by them, and there are currently no agreements, arrangements or understandings with respect to the sale of any of the securities. The table below assumes that the selling stockholder sell all of the shares offered for sale. Unless otherwise indicated, the business address of each person listed is in care of IEG Holdings Corporation, 6160 West Tropicana Ave, Suite E-13, Las Vegas, NV 89103.
29 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
Named Executive Officers and Directors: | ||||||||||||||||||||
MR PAUL JASON MATHIESON | 477,992,144 | 25.53 | % | 23,994,607 | 453,997,537 | 24.24 | % | |||||||||||||
All executive officers and directors as a group (2 persons) |
477,992,144 |
25.53 |
% |
23,994,607 |
453,997,537 |
24.24 |
% | |||||||||||||
Other 5% Stockholders: | ||||||||||||||||||||
FENWICK CORPORATION PTY LTD <FENWICK INVESTMENT A/C> | 123119848 | 6.57 | % | 6,250,992 | 116,868,856 | 6.24 | % | |||||||||||||
Other Selling Stockholders: |
||||||||||||||||||||
ASAL HOLDINGS | 61363671 | 3.28 | % | 3,163,184 | 58,200,487 | 3.11 | % | |||||||||||||
MORTGAGE BROKERS PTY LTD <FRANK WILKIE SUPER FUND A/C> | 60189036 | 3.21 | % | 3,104,452 | 57,084,584 | 3.05 | % | |||||||||||||
REID SUPER CO PTY LTD <WILLOUGHBY SUPER FUND A/C> | 54115080 | 2.89 | % | 2,800,754 | 51,314,326 | 2.74 | % | |||||||||||||
CLEM TACCA PTY LTD <CLEM TACCA FAMILY A/C> | 43301296 | 2.31 | % | 2,260,065 | 41,041,231 | 2.19 | % | |||||||||||||
MRS JUDITH PATRICIA WILLOUGHBY & MR WAYNE ROBERT WILLOUGHBY <WILLOUGHBY FAMILY A/C> | 39194736 | 2.09 | % | 2,054,737 | 37,139,999 | 1.98 | % | |||||||||||||
A MAGGIOTTO NOMINEES PTY LTD <MAGGIOTTO SUPER FUND A/C> | 36975000 | 1.97 | % | 1,943,750 | 35,031,250 | 1.87 | % | |||||||||||||
GREGS SERVICE PTY LTD <MCADAM FAMILY A/C> | 28253332 | 1.51 | % | 1,507,667 | 26,745,665 | 1.43 | % | |||||||||||||
DR LAKSHMAN PRASAD <DR L PRASAD SUPER FUND A/C> | 24644680 | 1.32 | % | 1,327,234 | 23,317,446 | 1.25 | % | |||||||||||||
GREGS SERVICE PTY LTD ATF EQUITIES TRADING TRUST | 21375898 | 1.14 | % | 1,163,795 | 20,212,103 | 1.08 | % | |||||||||||||
TOFINO TRADING LTD | 20000000 | 1.07 | % | 1,095,000 | 18,905,000 | 1.01 | % | |||||||||||||
OSSUM HOLDINGS PTY LTD <TANTON FAMILY NO 2 A/C> | 19514856 | 1.04 | % | 1,070,743 | 18,444,113 | 0.98 | % | |||||||||||||
MR IAN MATHIESON | 18896428 | 1.01 | % | 1,039,821 | 17,856,607 | 0.95 | % | |||||||||||||
GANT INVESTMENTS PTY LTD <GANT INVESTMENTS A/C> | 17111136 | 0.91 | % | 950,557 | 16,160,579 | 0.86 | % | |||||||||||||
WILLTECH SERVICES PTY LTD | 15276228 | 0.82 | % | 858,811 | 14,417,417 | 0.77 | % | |||||||||||||
HANDIBEAU PTY LIMITED <PRENDERGAST SUPER FUND A/C> | 14219388 | 0.76 | % | 805,969 | 13,413,419 | 0.72 | % | |||||||||||||
OSSUM HOLDINGS PTY LTD <TANTON SUPER FUND A/C> | 13993168 | 0.75 | % | 794,658 | 13,198,510 | 0.70 | % | |||||||||||||
GANT INVESTMENTS PTY LTD | 12583284 | 0.67 | % | 724,164 | 11,859,120 | 0.63 | % | |||||||||||||
MR SANTINO ANTHONY MASTROENI | 11460788 | 0.61 | % | 668,039 | 10,792,749 | 0.58 | % | |||||||||||||
DANSAN (AUST) PTY LTD <DANSAN FAMILY A/C> | 10821930 | 0.58 | % | 636,097 | 10,185,834 | 0.54 | % | |||||||||||||
MR WILLIAM PETER MAILE | 9257223 | 0.49 | % | 557,861 | 8,699,362 | 0.46 | % | |||||||||||||
DOMENIC TACCA PTY LTD <DOMENIC TACCA FAMILY A/C> | 8269616 | 0.44 | % | 508,481 | 7,761,135 | 0.41 | % | |||||||||||||
KEVIN HOWARD CRANE HIRE PTY LTD <K & M HOWARD S/FUND A/C> | 8018011 | 0.43 | % | 495,901 | 7,522,110 | 0.40 | % | |||||||||||||
OSSUM HOLDINGS PTY LTD <THE TANTON FAMILY A/C NO 2> | 7665064 | 0.41 | % | 478,253 | 7,186,811 | 0.38 | % | |||||||||||||
MR GIANNI MASON & MRS MARISSA MASON <THE MASON SUPER FUND A/C> | 7317566 | 0.39 | % | 460,878 | 6,856,688 | 0.37 | % | |||||||||||||
MR JAMES LAWRENSON & MRS ROSEMARIE LAWRENSON <LAWRENSON J & R S/FUND A/C> | 7188396 | 0.38 | % | 454,420 | 6,733,976 | 0.36 | % | |||||||||||||
MR IAN MCKAY GILMOUR & MRS CHRISTINE ANN GILMOUR <GILMOUR SUPER FUND A/C> | 7101636 | 0.38 | % | 450,082 | 6,651,554 | 0.36 | % | |||||||||||||
MR ROBERT ANDREW BLISS & MRS WENDY ANN BLISS <RAB INVESTMENTS P/L S/F A/C> | 7069408 | 0.38 | % | 448,470 | 6,620,938 | 0.35 | % | |||||||||||||
ADMIN NOMINEES PTY LTD <LOVETT FAMILY A/C> | 7065342 | 0.38 | % | 448,267 | 6,617,075 | 0.35 | % | |||||||||||||
OPTIMAL EQUITY PTY LTD | 6890464 | 0.37 | % | 439,523 | 6,450,941 | 0.34 | % | |||||||||||||
RAB INVESTMENTS PTY LTD | 6839592 | 0.37 | % | 436,980 | 6,402,612 | 0.34 | % | |||||||||||||
CLEM TACCA PTY LTD <CLEM TACCA FAMILY NO 2 A/C> | 5965296 | 0.32 | % | 393,265 | 5,572,031 | 0.30 | % | |||||||||||||
MURRANJI PTY LIMITED <TOOHEY FAMILY SUPERFUND A/C> | 5780956 | 0.31 | % | 384,048 | 5,396,908 | 0.29 | % | |||||||||||||
MR DAVID BRUCE CROSSLEY | 5711744 | 0.31 | % | 380,587 | 5,331,157 | 0.28 | % | |||||||||||||
R & H NOMINEES PTY LTD <R & H NOMINEES P/L S/F A/C> | 5319643 | 0.28 | % | 360,982 | 4,958,661 | 0.26 | % | |||||||||||||
MR MICHAEL HERBERT ROGERS <THE M H R ACCOUNT> | 5195118 | 0.28 | % | 354,756 | 4,840,362 | 0.26 | % | |||||||||||||
MR ARNOLD WILLIAM ROBERTSON | 5193904 | 0.28 | % | 354,695 | 4,839,209 | 0.26 | % | |||||||||||||
MR ERIC CHARLES DYER | 5023904 | 0.27 | % | 346,195 | 4,677,709 | 0.25 | % | |||||||||||||
TASMAN (VIC) PTY LTD <HOOPER SUPER FUND A/C> | 5000224 | 0.27 | % | 345,011 | 4,655,213 | 0.25 | % |
30 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR GIANNI MASON & MRS MARISSA MASON <THE MASON FAMILY A/C> | 4736250 | 0.25 | % | 331,813 | 4,404,438 | 0.24 | % | |||||||||||||
MR RAYMOND RAMANI & MS JAYA RANI <RAMANI FAMILY SUPER FUND> | 4732976 | 0.25 | % | 331,649 | 4,401,327 | 0.24 | % | |||||||||||||
MR BARRY ROBERT BULLEN | 4401472 | 0.24 | % | 315,074 | 4,086,398 | 0.22 | % | |||||||||||||
RON MEDICH PROPERTIES PTY LIMITED | 4364653 | 0.23 | % | 313,233 | 4,051,420 | 0.22 | % | |||||||||||||
FALDISON PTY LTD | 4180960 | 0.22 | % | 304,048 | 3,876,912 | 0.21 | % | |||||||||||||
MR ROBERT GEORGE PRENDERGAST & MRS MAREE ANN PRENDERGAST | 4144132 | 0.22 | % | 302,207 | 3,841,925 | 0.21 | % | |||||||||||||
ASCENDANT SC PTY LTD <ASCENDANT SC A/C> | 4129024 | 0.22 | % | 301,451 | 3,827,573 | 0.20 | % | |||||||||||||
GALICO PTY LTD <LACONO FAMILY A/C> | 4088640 | 0.22 | % | 299,432 | 3,789,208 | 0.20 | % | |||||||||||||
G.LB PTY LTD <THE G.LB SUPER FUND A/C> | 4042860 | 0.22 | % | 297,143 | 3,745,717 | 0.20 | % | |||||||||||||
MR ROBERT MALCOLM WILKIE & MRS LINDA ELIZABETH WILKIE <BIG BOSS INVESTMENTS A/C> | 4042856 | 0.22 | % | 297,143 | 3,745,713 | 0.20 | % | |||||||||||||
MR PETER ROBERT MOORE | 4000000 | 0.21 | % | 295,000 | 3,705,000 | 0.20 | % | |||||||||||||
C T SUPER PTY LTD | 3890480 | 0.21 | % | 289,524 | 3,600,956 | 0.19 | % | |||||||||||||
MR JOHN TURNBULL & MRS SOMPHONG TURNBULL <JOHN & GOI'S SUPER FUND A/C> | 3663770 | 0.20 | % | 278,189 | 3,385,582 | 0.18 | % | |||||||||||||
MR DEAN MARCON | 3489561 | 0.19 | % | 269,478 | 3,220,083 | 0.17 | % | |||||||||||||
MR GEOFFREY FRANCIS FONTAINE | 3463072 | 0.18 | % | 268,154 | 3,194,918 | 0.17 | % | |||||||||||||
MR BARRY WATSON & MRS JANET WATSON <WATSON FAMILY S/F A/C> | 3290704 | 0.18 | % | 259,535 | 3,031,169 | 0.16 | % | |||||||||||||
RESORT BROKERS PTY LTD <CROOKS FAMILY SUPERFUND A/C> | 3259082 | 0.17 | % | 257,954 | 3,001,128 | 0.16 | % | |||||||||||||
BJ & BL GANT PTY LTD <GANT SUPER FUND A/C> | 3217024 | 0.17 | % | 255,851 | 2,961,173 | 0.16 | % | |||||||||||||
SUPER KOOL ORANGES PTY LTD <HANSENS INVESTMENTS UNIT A/C> | 3205008 | 0.17 | % | 255,250 | 2,949,758 | 0.16 | % | |||||||||||||
MR MICHAEL MINICHIELLO & MRS THERESA MINICHIELLO <MINICHIELLO SUPER FUND A/C> | 3113332 | 0.17 | % | 250,667 | 2,862,665 | 0.15 | % | |||||||||||||
KAMBELL PTY LTD <GRANT FAMILY SUPER FUND A/C> | 3112924 | 0.17 | % | 250,646 | 2,862,278 | 0.15 | % | |||||||||||||
AUGUSTWAVE PTY LTD <AUGUSTWAVE SUPER A/C> | 3073846 | 0.16 | % | 248,692 | 2,825,154 | 0.15 | % | |||||||||||||
NICKBAH PTY LTD <M S BIGG BUSINESS A/C> | 3055106 | 0.16 | % | 247,755 | 2,807,351 | 0.15 | % | |||||||||||||
R & H WOODROW PTY LTD <WOODROW SUPER FUND A/C> | 3035840 | 0.16 | % | 246,792 | 2,789,048 | 0.15 | % | |||||||||||||
JENNIFER MAREE BALL | 3000000 | 0.16 | % | 245,000 | 2,755,000 | 0.15 | % | |||||||||||||
HAMILAH PTY LTD <THE HAMILAH SUPER FUND A/C> | 2997056 | 0.16 | % | 244,853 | 2,752,203 | 0.15 | % | |||||||||||||
MRS LISA MAREE VIDLER | 2962196 | 0.16 | % | 243,110 | 2,719,086 | 0.15 | % | |||||||||||||
MR ROBERT MALCOLM WILKIE & MRS LINDA ELIZABETH WILKIE <BROADBILL SUPER FUND A/C> | 2940288 | 0.16 | % | 242,014 | 2,698,274 | 0.14 | % | |||||||||||||
FIFTH GLENMAR PTY LTD <FIFTH GLENMAR PROPERTY A/C> | 2931343 | 0.16 | % | 241,567 | 2,689,776 | 0.14 | % | |||||||||||||
MR GEOFFREY LEWIS GODLEY & MRS CAROLYN JOAN GODLEY <GL & CJ GODLEY S/F A/C> | 2749361 | 0.15 | % | 232,468 | 2,516,893 | 0.13 | % | |||||||||||||
MR DAMIEN MATHIESON | 2729726 | 0.15 | % | 231,486 | 2,498,240 | 0.13 | % | |||||||||||||
GFF HOLDINGS PTY LTD <GFF SUPERANNUATION FUND A/C> | 2726472 | 0.15 | % | 231,324 | 2,495,148 | 0.13 | % | |||||||||||||
MR GEOFFREY LEWIS GODLEY & MRS CAROLYN JOAN GODLEY | 2709398 | 0.14 | % | 230,470 | 2,478,928 | 0.13 | % | |||||||||||||
MR CZESLAW MICHAEL KOZICKI & MRS ANGELE DANUTE KOZICKI <KOZICKI SUPER FUND A/C> | 2707588 | 0.14 | % | 230,379 | 2,477,209 | 0.13 | % | |||||||||||||
DAVID JENKINSON & ASSOC PTY LTD <JENKINSON FAMILY S/F A/C> | 2667944 | 0.14 | % | 228,397 | 2,439,547 | 0.13 | % | |||||||||||||
MR MICHAEL QUAGLIATA | 2618892 | 0.14 | % | 225,945 | 2,392,947 | 0.13 | % | |||||||||||||
MRS VICKI BELL & MR GRAHAM BELL <BELL FAMILY SUPER FUND A/C> | 2607144 | 0.14 | % | 225,357 | 2,381,787 | 0.13 | % | |||||||||||||
MR GEORGE LESLIE BLISS & MR JOSHUA DANIEL BLISS <THE GLB SUPER FUND A/C> | 2596952 | 0.14 | % | 224,848 | 2,372,104 | 0.13 | % | |||||||||||||
TRIAL DEVELOPMENTS PTY LTD | 2526992 | 0.13 | % | 221,350 | 2,305,642 | 0.12 | % | |||||||||||||
BEW'S KENNEL PTY LTD <WATSON TRADING A/C> | 2511376 | 0.13 | % | 220,569 | 2,290,807 | 0.12 | % | |||||||||||||
JANE MARGOT MARTIN | 2500000 | 0.13 | % | 220,000 | 2,280,000 | 0.12 | % |
31 |
32 |
33 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
QUANTUM ONE PTY LTD <CROWN DOMAIN A/C> | 1485834 | 0.08 | % | 169,292 | 1,316,542 | 0.07 | % | |||||||||||||
MR PETER MELVILLE KING & MRS ELIZABETH MARY KING | 1482712 | 0.08 | % | 169,136 | 1,313,576 | 0.07 | % | |||||||||||||
SOUTHWEST AUTOMOTIVE PTY LTD <SOUTHWEST AUTOMOTIVE S/F A/C> | 1481746 | 0.08 | % | 169,087 | 1,312,659 | 0.07 | % | |||||||||||||
MR JOHN THWAITES <THWAITES FAMILY S/F A/C> | 1473800 | 0.08 | % | 168,690 | 1,305,110 | 0.07 | % | |||||||||||||
TWIGG INVESTMENTS PTY LTD <TWIGG INVESTMENT A/C> | 1471429 | 0.08 | % | 168,571 | 1,302,858 | 0.07 | % | |||||||||||||
KERRIE LOUISE,GRAYSON | 1468853 | 0.08 | % | 168,443 | 1,300,410 | 0.07 | % | |||||||||||||
MR CONRAD MARTIN <CARDUB SUPER FUND A/C> | 1468522 | 0.08 | % | 168,426 | 1,300,096 | 0.07 | % | |||||||||||||
C F SUPERFUND PTY LTD <C F SUPER FUND A/C> | 1464048 | 0.08 | % | 168,202 | 1,295,846 | 0.07 | % | |||||||||||||
R & H NOMINEES PTY LTD <SUPERANNUATION FUND> C/-HANSENS ACCOUNTANTS PTY LTD | 1463280 | 0.08 | % | 168,164 | 1,295,116 | 0.07 | % | |||||||||||||
ARCHI-TECH SERVICES (VIC) PTY LTD <IBBOTT FAMILY SUPER FUND A/C> | 1461310 | 0.08 | % | 168,066 | 1,293,245 | 0.07 | % | |||||||||||||
KEW DIRECTORS PTY LTD <KEW DIRS S/F-PORTFOLIO A/C> | 1461310 | 0.08 | % | 168,066 | 1,293,245 | 0.07 | % | |||||||||||||
BLUE EAGLE INVESTMENTS PTY LTD <BLUE EAGLE SUPER FUND A/C> | 1461032 | 0.08 | % | 168,052 | 1,292,980 | 0.07 | % | |||||||||||||
PLAN B INVESTMENTS PTY LTD <PBI A/C> | 1457223 | 0.08 | % | 167,861 | 1,289,362 | 0.07 | % | |||||||||||||
MR BRENDAN PROWSE <PROWSE FAMILY INVESTMENT A/C> | 1449048 | 0.08 | % | 167,452 | 1,281,596 | 0.07 | % | |||||||||||||
MR ANGUS SCOTT EMERSON WILKIE | 1442104 | 0.08 | % | 167,105 | 1,274,999 | 0.07 | % | |||||||||||||
JAN FREDRIKSSON | 1440000 | 0.08 | % | 167,000 | 1,273,000 | 0.07 | % | |||||||||||||
MR IAN GRAEME PATTERSON <PATTERSON FAMILY A/C> | 1434139 | 0.08 | % | 166,707 | 1,267,432 | 0.07 | % | |||||||||||||
MR JASON RYAN | 1432135 | 0.08 | % | 166,607 | 1,265,528 | 0.07 | % | |||||||||||||
MR MARCEL KOCH <KOCH SUPERANNUATION FUND A/C> | 1428621 | 0.08 | % | 166,431 | 1,262,190 | 0.07 | % | |||||||||||||
MS MARIA MITROPOULOS | 1426731 | 0.08 | % | 166,337 | 1,260,394 | 0.07 | % | |||||||||||||
MR LESLIE TAYLOR & MRS SUSANNE TAYLOR <SOUTHWEST AUTOMOTIVE S/F A/C> | 1425000 | 0.08 | % | 166,250 | 1,258,750 | 0.07 | % | |||||||||||||
MRS FIONA PROWSE | 1424524 | 0.08 | % | 166,226 | 1,258,298 | 0.07 | % | |||||||||||||
MRS SHELLEY MARIE FOX | 1423538 | 0.08 | % | 166,177 | 1,257,361 | 0.07 | % | |||||||||||||
MR GEORGE WILLIAM BLAIR-WEST & MRS MARJORIE RAY BLAIR-WEST <BLAIR-WEST MEDICAL S/F A/C> | 1420821 | 0.08 | % | 166,041 | 1,254,780 | 0.07 | % | |||||||||||||
MR CONRAD MARTIN | 1418829 | 0.08 | % | 165,941 | 1,252,888 | 0.07 | % | |||||||||||||
PHILLIPS NOMINEES PTY LTD <PHILLIPS FAMILY A/C> | 1418750 | 0.08 | % | 165,938 | 1,252,813 | 0.07 | % | |||||||||||||
MR SEAMUS MARTIN & MRS JOAQUINA MARTIN <SHAYJO SUPER FUND A/C> | 1417996 | 0.08 | % | 165,900 | 1,252,096 | 0.07 | % | |||||||||||||
MR MARCEL KOCH & MRS URSULA KOCH <KOCH SUPER FUND A/C> | 1417613 | 0.08 | % | 165,881 | 1,251,732 | 0.07 | % | |||||||||||||
A & K DYER PTY LTD | 1417004 | 0.08 | % | 165,850 | 1,251,154 | 0.07 | % | |||||||||||||
INVESTMENT VISION PTY LTD <MAURICE DOVER SUPER A/C> | 1416064 | 0.08 | % | 165,803 | 1,250,261 | 0.07 | % | |||||||||||||
AVON RISE PTY LTD <SIXTH GYPSY P/L S/FUND A/C> | 1415000 | 0.08 | % | 165,750 | 1,249,250 | 0.07 | % | |||||||||||||
MR IAN PATTERSON <THE BLUME PATTERSON UNIT A/C> | 1412773 | 0.08 | % | 165,639 | 1,247,134 | 0.07 | % | |||||||||||||
MR ERIC JAMES FREW & MRS HEATHER JOY FREW | 1410620 | 0.08 | % | 165,531 | 1,245,089 | 0.07 | % | |||||||||||||
MR ALAN JOHN LAMB & MS SANDRA LYNN GIVENS <GLAMOUROUS SUPER FUND A/C> | 1410178 | 0.08 | % | 165,509 | 1,244,669 | 0.07 | % | |||||||||||||
MR CONRAD JOSEPH MARTIN | 1409354 | 0.08 | % | 165,468 | 1,243,886 | 0.07 | % | |||||||||||||
RAYMOND RAMANI & JAYA SUBRAMANIAN <THE RAMANI SUPER FUND A/C> | 1409180 | 0.08 | % | 165,459 | 1,243,721 | 0.07 | % | |||||||||||||
MR STEWART CRAIG DOBRZYNSKI & MRS FIONA JOANNE DOBRZYNSKI <DOBRZYNSKI FAMILY S/F A/C> | 1407848 | 0.08 | % | 165,392 | 1,242,456 | 0.07 | % | |||||||||||||
MR SEAMUS MARTIN <SHAYJO SUPER FUND A/C> | 1406912 | 0.08 | % | 165,346 | 1,241,566 | 0.07 | % | |||||||||||||
MR ADAM BLUME | 1403758 | 0.07 | % | 165,188 | 1,238,570 | 0.07 | % | |||||||||||||
MR IAN HAROLD BANKS | 1403636 | 0.07 | % | 165,182 | 1,238,454 | 0.07 | % |
34 |
35 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
EDWARD MORGAN & LINDA MORGAN <MORGAN SUPERANNUATION A/C> | 1164413 | 0.06 | % | 153,221 | 1,011,192 | 0.05 | % | |||||||||||||
MR ROBERT PRUYN | 1158491 | 0.06 | % | 152,925 | 1,005,566 | 0.05 | % | |||||||||||||
MRS LAINIE MAREE ADDINELL | 1129768 | 0.06 | % | 151,488 | 978,280 | 0.05 | % | |||||||||||||
MR IAN MATHIESON & MRS ANNA MATHIESON | 1103572 | 0.06 | % | 150,179 | 953,393 | 0.05 | % | |||||||||||||
IAN MURRAY & ELIZABETH ANN, HARDCASTLE <JIAH SUPER FUND> | 1095644 | 0.06 | % | 149,782 | 945,862 | 0.05 | % | |||||||||||||
MRS MERRYL ANDREE SHAND | 1073572 | 0.06 | % | 148,679 | 924,893 | 0.05 | % | |||||||||||||
MR TIMOTHY JAMES JARVIS & MS GERARDINE ANNE WALSH | 1072169 | 0.06 | % | 148,608 | 923,561 | 0.05 | % | |||||||||||||
MS BARBARA KENDRICK | 1070877 | 0.06 | % | 148,544 | 922,333 | 0.05 | % | |||||||||||||
BAGETON NOMINEES PTY LTD <KUCHARSKI FAMILY A/C> | 1065400 | 0.06 | % | 148,270 | 917,130 | 0.05 | % | |||||||||||||
MS THERESA IBBOTT UNIT 5 | 1061310 | 0.06 | % | 148,066 | 913,245 | 0.05 | % | |||||||||||||
MR MARIO POLETTI & MRS GLENYS POLETTI | 1061310 | 0.06 | % | 148,066 | 913,245 | 0.05 | % | |||||||||||||
MRS RITA TACCONE & MR DOMENICO TACCONE | 1055960 | 0.06 | % | 147,798 | 908,162 | 0.05 | % | |||||||||||||
NORTHAM PARK PTY LTD <BCA HUDSON SUPER FUND A/C> | 1052114 | 0.06 | % | 147,606 | 904,508 | 0.05 | % | |||||||||||||
MR KEVIN VARDY <VARDY SUPER FUND A/C> | 1049048 | 0.06 | % | 147,452 | 901,596 | 0.05 | % | |||||||||||||
MR WILLIAM JOHN VALLENCE | 1037370 | 0.06 | % | 146,869 | 890,502 | 0.05 | % | |||||||||||||
MS JOANNA HOWE | 1036786 | 0.06 | % | 146,839 | 889,947 | 0.05 | % | |||||||||||||
MR GARY DAVID DOUGLAS | 1032442 | 0.06 | % | 146,622 | 885,820 | 0.05 | % | |||||||||||||
MS JOANNA HOWE & MS HAILEY HOWE & MS RIANNA PAGANO | 1029779 | 0.05 | % | 146,489 | 883,290 | 0.05 | % | |||||||||||||
NEIL JOHN BALL AND LYNDI ELIZABETH BALL <BALL FAMILY TRUST> | 1022400 | 0.05 | % | 146,120 | 876,280 | 0.05 | % | |||||||||||||
MR RICHARD HOWE & MR CHRIS SERTIC | 1019159 | 0.05 | % | 145,958 | 873,201 | 0.05 | % | |||||||||||||
MR SCOTT SPLADE & MRS CAROL SPLADE | 1018000 | 0.05 | % | 145,900 | 872,100 | 0.05 | % | |||||||||||||
MR EUGENE KATSOS | 1017985 | 0.05 | % | 145,899 | 872,086 | 0.05 | % | |||||||||||||
DAVID, NITSCHKE | 1016651 | 0.05 | % | 145,833 | 870,818 | 0.05 | % | |||||||||||||
MR ROBERT MARK PRUYN | 1015539 | 0.05 | % | 145,777 | 869,762 | 0.05 | % | |||||||||||||
MR GORDON JOSEPH MASLIN & MRS CHRISTINA MASLIN <FARMCOSTALOTA SUPER FUND A/C> | 1015001 | 0.05 | % | 145,750 | 869,251 | 0.05 | % | |||||||||||||
MR NICHOLAS MOLONEY & MRS LISA MOLONEY | 1015000 | 0.05 | % | 145,750 | 869,250 | 0.05 | % | |||||||||||||
MR TIMOTHY JOHN OLIVER | 1014633 | 0.05 | % | 145,732 | 868,901 | 0.05 | % | |||||||||||||
MR DOMENIC CACCAMO | 1012916 | 0.05 | % | 145,646 | 867,270 | 0.05 | % | |||||||||||||
MR SERGIO FORZA <FORZAS1 SUPERANNUATION A/C> | 1011496 | 0.05 | % | 145,575 | 865,921 | 0.05 | % | |||||||||||||
MRS FRANCES CACCAMO | 1010627 | 0.05 | % | 145,531 | 865,096 | 0.05 | % | |||||||||||||
MR MICHAEL JOSEPH MCCANN | 1009810 | 0.05 | % | 145,491 | 864,320 | 0.05 | % | |||||||||||||
SURREY PARK PTY LTD <SURREY PARK FAMILY A/C> | 1008993 | 0.05 | % | 145,450 | 863,543 | 0.05 | % | |||||||||||||
MR PETER DESMOND WILSON <THE WILSON CLAN FAMILY A/C> | 1008261 | 0.05 | % | 145,413 | 862,848 | 0.05 | % | |||||||||||||
MR GEOFFREY RONALD SULLIVAN & MRS PAMELA MARGARET SULLIVAN <THE SULLIVAN SUPER FUND A/C> | 1006660 | 0.05 | % | 145,333 | 861,327 | 0.05 | % | |||||||||||||
MR. PETER WILLIAM HEARMAN & MRS. PENELOPE JANE HEARMAN <HEARMAN SUPER FUND A/C> | 1003728 | 0.05 | % | 145,186 | 858,542 | 0.05 | % | |||||||||||||
MS KERRIE LOUISE GRAYSON | 1003373 | 0.05 | % | 145,169 | 858,204 | 0.05 | % | |||||||||||||
VAINGIRL NOMINEES PTY LTD <SUNDAY TRADING A/C> | 1002862 | 0.05 | % | 145,143 | 857,719 | 0.05 | % | |||||||||||||
A F H M PTY LTD | 1002382 | 0.05 | % | 145,119 | 857,263 | 0.05 | % | |||||||||||||
MS KERRY GRAYSON <KERRIE LOUISE GRAYSON A/C> | 1001079 | 0.05 | % | 145,054 | 856,025 | 0.05 | % | |||||||||||||
MR RAYMOND CRAWSHAW & MRS BRENDA CRAWSHAW | 1000940 | 0.05 | % | 145,047 | 855,893 | 0.05 | % |
36 |
37 |
38 |
39 |
40 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR GORDON HERIOT | 426980 | 0.02 | % | 116,349 | 310,631 | 0.02 | % | |||||||||||||
MR STEPHEN BURNS & MRS ROSALIND BURNS <BURNS FAMILY SUPER FUND A/C> | 424524 | 0.02 | % | 116,226 | 308,298 | 0.02 | % | |||||||||||||
MCCANN SMSF PTY LTD <MCCANN SUPER FUND A/C> | 424524 | 0.02 | % | 116,226 | 308,298 | 0.02 | % | |||||||||||||
MR KEVIN RILEY <RILEY SUPER FUND A/C> | 424524 | 0.02 | % | 116,226 | 308,298 | 0.02 | % | |||||||||||||
BJ & BL GANT PTY LTD <SUPERANNUATION FUND A/C> | 423707 | 0.02 | % | 116,185 | 307,522 | 0.02 | % | |||||||||||||
MRS RACHEL JOYCE & MS CARLY JOYCE <THE JOYBELL NOMINEES S/F A/C> | 421429 | 0.02 | % | 116,071 | 305,358 | 0.02 | % | |||||||||||||
KAMBELL PTY LTD | 420968 | 0.02 | % | 116,048 | 304,920 | 0.02 | % | |||||||||||||
MS LINDA LEE KACHEL | 420823 | 0.02 | % | 116,041 | 304,782 | 0.02 | % | |||||||||||||
GEOFFREY RONALD & PAMELA M, SULLIVAN | 420509 | 0.02 | % | 116,025 | 304,484 | 0.02 | % | |||||||||||||
MR PETER RYAN GILMOUR | 420000 | 0.02 | % | 116,000 | 304,000 | 0.02 | % | |||||||||||||
MR DAVID WILLIAM VAN ROOYEN & MRS TONI VAN ROOYEN | 419929 | 0.02 | % | 115,996 | 303,933 | 0.02 | % | |||||||||||||
FIRST EQUITY CAPITAL PTY LTD <FIRST EQUITY FINANCE FND A/C> | 419774 | 0.02 | % | 115,989 | 303,785 | 0.02 | % | |||||||||||||
MR DOUGLAS DILLON & MR STEPHEN WHAREKAWA | 419565 | 0.02 | % | 115,978 | 303,587 | 0.02 | % | |||||||||||||
AVIWED PTY LTD | 419048 | 0.02 | % | 115,952 | 303,096 | 0.02 | % | |||||||||||||
MR GREG LOCK | 418393 | 0.02 | % | 115,920 | 302,473 | 0.02 | % | |||||||||||||
MS GLORIA MARGARET HARTNEY | 418291 | 0.02 | % | 115,915 | 302,376 | 0.02 | % | |||||||||||||
KENOBI HOLDINGS PTY LTD <THE CASPERO UNIT A/C> | 417604 | 0.02 | % | 115,880 | 301,724 | 0.02 | % | |||||||||||||
MR PETER LEWIS <LEWIS SUPER FUND A/C> | 417449 | 0.02 | % | 115,872 | 301,577 | 0.02 | % | |||||||||||||
MR VINCENT HUGH HORSBURGH | 416639 | 0.02 | % | 115,832 | 300,807 | 0.02 | % | |||||||||||||
MR DAVE WARD <WARD FAMILY SUPER FUND A/C> | 415328 | 0.02 | % | 115,766 | 299,562 | 0.02 | % | |||||||||||||
FROSTI SUPER PTY LTD <MAGGIEARNOLD SUPER FUND> | 415024 | 0.02 | % | 115,751 | 299,273 | 0.02 | % | |||||||||||||
GEOFF FRENCH & JACQUELINE GIBSON <LIFE ENRICH ENTER S/F A/C> | 415000 | 0.02 | % | 115,750 | 299,250 | 0.02 | % | |||||||||||||
MR BILL JACKSON & MRS DAWN JACKSON | 414868 | 0.02 | % | 115,743 | 299,125 | 0.02 | % | |||||||||||||
MS MIRIAM NERVO | 414812 | 0.02 | % | 115,741 | 299,071 | 0.02 | % | |||||||||||||
ANNETTE, BUDARICK < THE BUDARICK FAMILY A/C > | 414650 | 0.02 | % | 115,733 | 298,918 | 0.02 | % | |||||||||||||
GEOFFREY LEWIS & CAROLYN JOAN,GODLEY <GI & CJ GODLEY SUPERFUND> | 414650 | 0.02 | % | 115,733 | 298,918 | 0.02 | % | |||||||||||||
ERIC JAMES & HEATHER JOY& LISA R,FREW | 414650 | 0.02 | % | 115,733 | 298,918 | 0.02 | % | |||||||||||||
MR. DAVID JOHN KADEN & MRS. CYNTHIA JOY KADEN | 414650 | 0.02 | % | 115,733 | 298,918 | 0.02 | % | |||||||||||||
KERRY LYNETTE,GREENOP | 414650 | 0.02 | % | 115,733 | 298,918 | 0.02 | % | |||||||||||||
MRS RACHEL NICOLE JOYCE & MS CARLY MAREE JOYCE <JOYBELL NOMINEES S/F A/C> | 413606 | 0.02 | % | 115,680 | 297,926 | 0.02 | % | |||||||||||||
ANTHONY & ABIGAIL, KOOY < A&A KOOY SUPER FUND> | 413352 | 0.02 | % | 115,668 | 297,684 | 0.02 | % | |||||||||||||
MR KEITH VUICHOUD <K VUICHOUD PENSION FUND A/C> | 412857 | 0.02 | % | 115,643 | 297,214 | 0.02 | % | |||||||||||||
MR LAKSHMAN PRASAD | 412192 | 0.02 | % | 115,610 | 296,582 | 0.02 | % | |||||||||||||
MR ANDREW VINCENT SMART | 411100 | 0.02 | % | 115,555 | 295,545 | 0.02 | % | |||||||||||||
MR ROSS NOEL ULLMAN & MRS SUZANNE ULLMAN <THE NAMLLU SUPER FUND A/C> | 411036 | 0.02 | % | 115,552 | 295,484 | 0.02 | % | |||||||||||||
MR KEVIN RILEY | 410730 | 0.02 | % | 115,537 | 295,194 | 0.02 | % | |||||||||||||
D CHIARAVALLE & E CHIARAVALLE <TUSCANY SUPER FUND A/C> | 409375 | 0.02 | % | 115,469 | 293,906 | 0.02 | % | |||||||||||||
MR DAVID JOHN KADEN & MRS CYNTHIA JOY KADEN | 409253 | 0.02 | % | 115,463 | 293,790 | 0.02 | % | |||||||||||||
GRAHAM, WARDEN < THE WARDEN SUPER FUND> | 408790 | 0.02 | % | 115,440 | 293,351 | 0.02 | % | |||||||||||||
MS MARGARET MARY CAMENS | 408539 | 0.02 | % | 115,427 | 293,112 | 0.02 | % |
41 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MS RAELENE DEBRA HAMILTON | 408175 | 0.02 | % | 115,409 | 292,766 | 0.02 | % | |||||||||||||
MS MUJI RETNA MUNAWATI | 407603 | 0.02 | % | 115,380 | 292,223 | 0.02 | % | |||||||||||||
LINDA-LEE, KACHEL | 407325 | 0.02 | % | 115,366 | 291,959 | 0.02 | % | |||||||||||||
MARCEL & URSULA, KOCH < KOCH SUPER FUND> | 407325 | 0.02 | % | 115,366 | 291,959 | 0.02 | % | |||||||||||||
PAUL & RUGH , HOOGENRAAD | 407325 | 0.02 | % | 115,366 | 291,959 | 0.02 | % | |||||||||||||
ANTHONY LLOYD, VAN COOTEN | 407325 | 0.02 | % | 115,366 | 291,959 | 0.02 | % | |||||||||||||
MR NOEL ARTHUR YOUNG & MRS ESTELLE MERLE YOUNG | 407148 | 0.02 | % | 115,357 | 291,791 | 0.02 | % | |||||||||||||
WILLIAM JOHN, VALLENCE | 406931 | 0.02 | % | 115,347 | 291,584 | 0.02 | % | |||||||||||||
MR ROSS ULLMAN & MRS SUZANNE ULLMAN <THE NAMLLU SUPER FUND A/C> | 406898 | 0.02 | % | 115,345 | 291,553 | 0.02 | % | |||||||||||||
MRS CAMILLA PRENDERGAST | 406868 | 0.02 | % | 115,343 | 291,525 | 0.02 | % | |||||||||||||
DR CAROLYN WILLIAMS | 406603 | 0.02 | % | 115,330 | 291,273 | 0.02 | % | |||||||||||||
JENNIFER, SHEHADEH | 406581 | 0.02 | % | 115,329 | 291,252 | 0.02 | % | |||||||||||||
MS LESLEY ANNE SMITHERS | 406515 | 0.02 | % | 115,326 | 291,189 | 0.02 | % | |||||||||||||
MS DIANNA ZIVANOVIC | 406357 | 0.02 | % | 115,318 | 291,039 | 0.02 | % | |||||||||||||
MR LEN MACLEAN | 406237 | 0.02 | % | 115,312 | 290,925 | 0.02 | % | |||||||||||||
MR TERRY HARRINGTON & MS JULIE THOMAS | 405933 | 0.02 | % | 115,297 | 290,636 | 0.02 | % | |||||||||||||
MR WILLIAM ROY JACKSON | 405758 | 0.02 | % | 115,288 | 290,470 | 0.02 | % | |||||||||||||
MRS VERA SMOLONOGOV | 405518 | 0.02 | % | 115,276 | 290,242 | 0.02 | % | |||||||||||||
MR PAUL HOOGENRAAD & MRS RUTH HOOGENRAAD | 405394 | 0.02 | % | 115,270 | 290,124 | 0.02 | % | |||||||||||||
MR JAKE EMMERSON | 404904 | 0.02 | % | 115,245 | 289,659 | 0.02 | % | |||||||||||||
MS SHANULISA PRASAD | 404628 | 0.02 | % | 115,231 | 289,397 | 0.02 | % | |||||||||||||
MR IAN STEWART VAN DER WERFF & MS LINDA ELIZABETH LAYTON VAN DER WERF <LINIAN SUPER FUND A/C> | 404088 | 0.02 | % | 115,204 | 288,884 | 0.02 | % | |||||||||||||
MR RAYMOND THOMAS CHENSEE | 403984 | 0.02 | % | 115,199 | 288,785 | 0.02 | % | |||||||||||||
MR GEORGE EDGAR BLAIR-WEST & MRS MARJORIE RAY BLAIR-WEST <BLAIR-WEST MED PENS FUND A/C> | 403983 | 0.02 | % | 115,199 | 288,784 | 0.02 | % | |||||||||||||
MR JOHN FEDERICO | 403697 | 0.02 | % | 115,185 | 288,512 | 0.02 | % | |||||||||||||
MR GREG MCADAM & MRS JENNIFER MCADAM <GREG AND JEN'S SMSF A/C> | 403679 | 0.02 | % | 115,184 | 288,495 | 0.02 | % | |||||||||||||
MR SEAMUS FRANCIS MARTIN & MRS JOAQUINA THERESE MARTIN | 403328 | 0.02 | % | 115,166 | 288,162 | 0.02 | % | |||||||||||||
MR DOUGLAS R DILLON | 403306 | 0.02 | % | 115,165 | 288,141 | 0.02 | % | |||||||||||||
MR CRAIG WALPOLE & MRS TRACY WALPOLE <THE TRINITY SUPER FUND A/C> | 403306 | 0.02 | % | 115,165 | 288,141 | 0.02 | % | |||||||||||||
MR STEPHEN P WHAREKAWA | 403305 | 0.02 | % | 115,165 | 288,140 | 0.02 | % | |||||||||||||
TREKDALE PTY LTD | 403086 | 0.02 | % | 115,154 | 287,932 | 0.02 | % | |||||||||||||
MR JOHN FLYNN & MS MICHELLE CURRAN | 403000 | 0.02 | % | 115,150 | 287,850 | 0.02 | % | |||||||||||||
MR ANTHONY BADGER <A BADGER & L KACHEL S/F A/C> | 402967 | 0.02 | % | 115,148 | 287,819 | 0.02 | % | |||||||||||||
MR JOHN EDWARD HARTNEY & MRS ALDONA OLGA HARTNEY | 402752 | 0.02 | % | 115,138 | 287,614 | 0.02 | % | |||||||||||||
MR PETER ALBERT DOUGLAS GRIEVE & MRS EVELYN JOY GRIEVE | 402457 | 0.02 | % | 115,123 | 287,334 | 0.02 | % | |||||||||||||
MR LENNOX MACLEAN & MR MILTON FRITH & MR RICHARD PATRICK BUNGEY | 402453 | 0.02 | % | 115,123 | 287,330 | 0.02 | % | |||||||||||||
MR EDDIE ZODINS & MRS KATIE ZODINS <ZODINS SUPER FUND A/C> | 402442 | 0.02 | % | 115,122 | 287,320 | 0.02 | % | |||||||||||||
MR ANTHONY LLOYD VAN COOTEN | 402356 | 0.02 | % | 115,118 | 287,238 | 0.02 | % |
42 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR KENNETH BASIL TYSON & MRS CHRISTINE MICHELLE TYSON | 402223 | 0.02 | % | 115,111 | 287,112 | 0.02 | % | |||||||||||||
MR LEIGH STAFFORD <STAFFORD INVESTMENT A/C> | 402121 | 0.02 | % | 115,106 | 287,015 | 0.02 | % | |||||||||||||
R & J PTY LTD <RAMANI FAMILY A/C> | 402010 | 0.02 | % | 115,101 | 286,910 | 0.02 | % | |||||||||||||
MS JULIE DIANE THOMAS | 401962 | 0.02 | % | 115,098 | 286,864 | 0.02 | % | |||||||||||||
MR JOHN TOIGO & MRS FIONA TOIGO <TOIGO SUPER FUND A/C> | 401962 | 0.02 | % | 115,098 | 286,864 | 0.02 | % | |||||||||||||
ROBERT MALCOM, WILKIE | 401954 | 0.02 | % | 115,098 | 286,856 | 0.02 | % | |||||||||||||
MR GLEN JOYCE & MRS JUDY JOYCE | 401946 | 0.02 | % | 115,097 | 286,849 | 0.02 | % | |||||||||||||
MR ROGER THOMAS GOLDING | 401890 | 0.02 | % | 115,095 | 286,796 | 0.02 | % | |||||||||||||
NONNENMACHER ENTERPRISES PTY LTD <NONNENMACHER S/F A/C> | 401750 | 0.02 | % | 115,088 | 286,663 | 0.02 | % | |||||||||||||
MR GEOFFREY MALCOLM TAYLOR & MRS SUZANNE JENNIFER TAYLOR & MR MILTON DOUGLAS TAYLOR <PARADIGM DEVELOPMENTS SF | 401653 | 0.02 | % | 115,083 | 286,570 | 0.02 | % | |||||||||||||
MR TERRY JAMES HARRINGTON & MS JULIE DIANE THOMAS | 401500 | 0.02 | % | 115,075 | 286,425 | 0.02 | % | |||||||||||||
MR LUKE DOMINIC PAUL HOLLAND | 401276 | 0.02 | % | 115,064 | 286,212 | 0.02 | % | |||||||||||||
MR TERRY JAMES HARRINGTON | 401200 | 0.02 | % | 115,060 | 286,140 | 0.02 | % | |||||||||||||
MR GEOFFREY RONALD SULLIVAN & MRS PAMELA SULLIVAN | 401200 | 0.02 | % | 115,060 | 286,140 | 0.02 | % | |||||||||||||
MR KEITH ARNOLD VUICHOUD & MRS JOANNE VUICHOUD <KEITH VUICHOUD PENS FUND A/C> | 401072 | 0.02 | % | 115,054 | 286,018 | 0.02 | % | |||||||||||||
MR DONALD BRUCE PFITZNER & MRS GLORIA JOY PFITZNER <PFITZNER WANGARA S/FUND A/C> | 401063 | 0.02 | % | 115,053 | 286,010 | 0.02 | % | |||||||||||||
MR RUSSELL JOHN WILKIE | 400832 | 0.02 | % | 115,042 | 285,790 | 0.02 | % | |||||||||||||
MR WILLIAM JACKSON <TREKDALE PTY LTD A/C> | 400767 | 0.02 | % | 115,038 | 285,729 | 0.02 | % | |||||||||||||
MR JASON B PFITZNER & MR DONALD R PFITZNER <PFITZNER WANGARA S/F A/C> | 400767 | 0.02 | % | 115,038 | 285,729 | 0.02 | % | |||||||||||||
MR BRIAN PRICE & MRS CHRISTINE PRICE | 400767 | 0.02 | % | 115,038 | 285,729 | 0.02 | % | |||||||||||||
MR ANDREW LEONARD SMITHERS | 400736 | 0.02 | % | 115,037 | 285,699 | 0.02 | % | |||||||||||||
MR GEOFF WHITTOME & MRS LEE WHITTOME <THE COLUMBUS SUPER P/F A/C> | 400735 | 0.02 | % | 115,037 | 285,698 | 0.02 | % | |||||||||||||
MRS EVELYN GRIEVE | 400731 | 0.02 | % | 115,037 | 285,694 | 0.02 | % | |||||||||||||
MR KEVIN FRANCIS WOOD | 400536 | 0.02 | % | 115,027 | 285,509 | 0.02 | % | |||||||||||||
MR PATRICK LOQUANCIO | 400525 | 0.02 | % | 115,026 | 285,499 | 0.02 | % | |||||||||||||
MR KENNETH TYSON & MRS CHRISTINE TYSON | 400428 | 0.02 | % | 115,021 | 285,407 | 0.02 | % | |||||||||||||
MR OWEN J STEINHARDT & MRS LYNITA A STEINHARDT | 400427 | 0.02 | % | 115,021 | 285,406 | 0.02 | % | |||||||||||||
MR JAMES ALEXANDER GRANT <AWARD SAVER A/C> | 400200 | 0.02 | % | 115,010 | 285,190 | 0.02 | % | |||||||||||||
MR ERIC LLOYD VAN COOTEN & MRS ENID CLARA VAN COOTEN | 400092 | 0.02 | % | 115,005 | 285,087 | 0.02 | % | |||||||||||||
MR RODNEY MALCOLM BLACK | 400043 | 0.02 | % | 115,002 | 285,041 | 0.02 | % | |||||||||||||
MS HEATHER J FREW & MS LISA R TURNER | 400043 | 0.02 | % | 115,002 | 285,041 | 0.02 | % | |||||||||||||
MS KYLIE KOUVELAS | 400043 | 0.02 | % | 115,002 | 285,041 | 0.02 | % | |||||||||||||
MR KEITH ARNOLD VUICHOLD | 400043 | 0.02 | % | 115,002 | 285,041 | 0.02 | % | |||||||||||||
MR BRETT DURDIN | 400036 | 0.02 | % | 115,002 | 285,034 | 0.02 | % | |||||||||||||
ELLIS E. SMITH | 400000 | 0.02 | % | 115,000 | 285,000 | 0.02 | % | |||||||||||||
MR DOMINIC CHIARAVALLE & MRS EVA CHIARAVALLE <TUSCANY SUPER FUND A/C> | 400000 | 0.02 | % | 115,000 | 285,000 | 0.02 | % | |||||||||||||
MR GLENN ROBERT & MRS JOANNA LUETCHFORD PRENDERGAST | 400000 | 0.02 | % | 115,000 | 285,000 | 0.02 | % | |||||||||||||
MR DARREN STEVEN HUTCHINSON <DS HUTCHINSON SUPER A/C> | 400000 | 0.02 | % | 115,000 | 285,000 | 0.02 | % | |||||||||||||
MR CHARLES JONES | 400000 | 0.02 | % | 115,000 | 285,000 | 0.02 | % | |||||||||||||
MR CHARLES ANTHONY JONES & MRS BELINDA MAREE JONES | 400000 | 0.02 | % | 115,000 | 285,000 | 0.02 | % |
43 |
44 |
45 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR PETER MACBEAN STEWART & MRS ROBIN KATHLEEN STEWART | 191286 | 0.01 | % | 104,564 | 86,722 | 0.00 | % | |||||||||||||
MR ANTHONY PIZZOLATO | 191000 | 0.01 | % | 104,550 | 86,450 | 0.00 | % | |||||||||||||
MR DANIEL DALZOTTO | 180905 | 0.01 | % | 104,045 | 76,860 | 0.00 | % | |||||||||||||
ALEXANDER THOMAS COCKBURN-CAMPBELL & KERRY ANNE COCKBURN-CAMPBELL | 180086 | 0.01 | % | 104,004 | 76,082 | 0.00 | % | |||||||||||||
GREENPEAS INVESTMENTS PTY LTD <THE B & J HANSEN FAMILY A/C> | 175536 | 0.01 | % | 103,777 | 71,759 | 0.00 | % | |||||||||||||
ELLON NOMINEES PTY LTD <ELLON FAMILY A/C> | 170358 | 0.01 | % | 103,518 | 66,840 | 0.00 | % | |||||||||||||
MS SHEHARA WIJETUNGA | 169933 | 0.01 | % | 103,497 | 66,436 | 0.00 | % | |||||||||||||
WHITE EAGLE NOMINEES PTY LTD <MANN FAMILY SUPER FUND A/C> | 168966 | 0.01 | % | 103,448 | 65,518 | 0.00 | % | |||||||||||||
MR ANDREW SCOTT WILLIS | 167912 | 0.01 | % | 103,396 | 64,516 | 0.00 | % | |||||||||||||
MRS BREE CHRISTINA GRANT & MR DALE PHILIP ALAN GRANT | 166772 | 0.01 | % | 103,339 | 63,433 | 0.00 | % | |||||||||||||
GEOFFREY WALLIS, ARUNDELL | 157325 | 0.01 | % | 102,866 | 54,459 | 0.00 | % | |||||||||||||
MR JOHN MICHAEL HEARMAN | 155450 | 0.01 | % | 102,773 | 52,678 | 0.00 | % | |||||||||||||
MS LEONE SIGNA BALDOCK | 150129 | 0.01 | % | 102,506 | 47,623 | 0.00 | % | |||||||||||||
MRS JULIE GOWAN <KRISTIAN GOWAN A/C> | 150038 | 0.01 | % | 102,502 | 47,536 | 0.00 | % | |||||||||||||
MR. ALEXANDER K ROLLEY & MRS. LANA T. ROLLEY | 150000 | 0.01 | % | 102,500 | 47,500 | 0.00 | % | |||||||||||||
MAREETA V ROLLEY | 150000 | 0.01 | % | 102,500 | 47,500 | 0.00 | % | |||||||||||||
SYNMAN NOMINEES PTY LTD <IMJWS SUPER FUND A/C> | 150000 | 0.01 | % | 102,500 | 47,500 | 0.00 | % | |||||||||||||
MR CHARLES JONES | 147144 | 0.01 | % | 102,357 | 44,787 | 0.00 | % | |||||||||||||
MR PETER HEARMAN <HEARMAN FAMILY A/C> | 147143 | 0.01 | % | 102,357 | 44,786 | 0.00 | % | |||||||||||||
MR GEORGE VLAHOS & MRS COLLEEN VLAHOS <VLAHOS SUPER FUND A/C> | 139786 | 0.01 | % | 101,989 | 37,797 | 0.00 | % | |||||||||||||
ADDVOKAT PTY LTD <ADDVOKAT A/C> | 134247 | 0.01 | % | 101,712 | 32,535 | 0.00 | % | |||||||||||||
ERSTEIN PTY LTD <THE HARTLAND FAMILY A/C> | 133976 | 0.01 | % | 101,699 | 32,277 | 0.00 | % | |||||||||||||
MR GEORGE VHALOS & MRS COLLEEN VHALOS <VHALOS SUPER FUND A/C> | 132429 | 0.01 | % | 101,621 | 30,808 | 0.00 | % | |||||||||||||
MARGARET MARY, CAMENS | 132056 | 0.01 | % | 101,603 | 30,453 | 0.00 | % | |||||||||||||
MICHAEL JOHN & TRACEY LEE, BOWNE | 132056 | 0.01 | % | 101,603 | 30,453 | 0.00 | % | |||||||||||||
JAXLAND PTY LTD <D & L PUTLAND FAMILY A/C> | 128750 | 0.01 | % | 101,438 | 27,313 | 0.00 | % | |||||||||||||
R & H NOMINEES PTY LTD <R&H NOMINEES SUPER FUND A/C> | 126422 | 0.01 | % | 101,321 | 25,101 | 0.00 | % | |||||||||||||
MR IAN FOSTER & MRS DENISE FOSTER <FOSTER SUPER FUND A/C> | 126108 | 0.01 | % | 101,305 | 24,803 | 0.00 | % | |||||||||||||
MR TONY JORDAN & MS DENISE MURPHY & JORDAN MURPHY PTY LTD | 124721 | 0.01 | % | 101,236 | 23,485 | 0.00 | % | |||||||||||||
MR COLIN J DAMIANI & MRS DIANE R DAMIANI | 123328 | 0.01 | % | 101,166 | 22,162 | 0.00 | % | |||||||||||||
MR DAVID MARCON & MRS RACHELA MARCON | 123270 | 0.01 | % | 101,164 | 22,107 | 0.00 | % | |||||||||||||
MS JAN LOUISE GREENE | 123132 | 0.01 | % | 101,157 | 21,975 | 0.00 | % | |||||||||||||
SALORA STATION PTY LTD <HIGHBRAY ABSOLUTE ENTITL AC> | 123132 | 0.01 | % | 101,157 | 21,975 | 0.00 | % | |||||||||||||
G A GIUSTI CONSTRUCTION PTY LIMITED | 119985 | 0.01 | % | 100,999 | 18,986 | 0.00 | % | |||||||||||||
JULIE & ROBERT BRIAN, BURNS | 110870 | 0.01 | % | 100,544 | 10,327 | 0.00 | % | |||||||||||||
MCTUNGA NOMINEES PTY LTD <SHEETMETAL STAFF S/F A/C> | 110812 | 0.01 | % | 100,541 | 10,271 | 0.00 | % | |||||||||||||
PAYNE CORPORATION PTY LTD <PAYNE SUPER FUND A/C> | 108509 | 0.01 | % | 100,425 | 8,084 | 0.00 | % | |||||||||||||
MARY, MILES < MILES FAMILY SUPER FUND PTY LTD> | 108406 | 0.01 | % | 100,420 | 7,986 | 0.00 | % |
46 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
STC ADVISORY PTY LTD <CHALABIAN FAMILY A/C> | 108009 | 0.01 | % | 100,400 | 7,609 | 0.00 | % | |||||||||||||
MR FREDERICK JAMES PARK & MRS THELMA LORNA PARK | 107839 | 0.01 | % | 100,392 | 7,447 | 0.00 | % | |||||||||||||
MR ANTHONY CICCARELLI & MRS CARLA CICCARELLI | 104227 | 0.01 | % | 100,211 | 4,016 | 0.00 | % | |||||||||||||
MS SUSAN MONGELLI & MR PETER WATERS <SIRIUS SUPER FUND A/C> | 104227 | 0.01 | % | 100,211 | 4,016 | 0.00 | % | |||||||||||||
MR ROSS ARDITA & MRS MARIA ARDITA | 103336 | 0.01 | % | 100,167 | 3,169 | 0.00 | % | |||||||||||||
MR BENJAMIN ALAN YOUNG | 103192 | 0.01 | % | 100,160 | 3,032 | 0.00 | % | |||||||||||||
PRASHANTA KUMAR CHATTERJEE & JENNIFER CHATTERJEE & ROBINDRA NARAYAN CHATTERJEE <CHATTERJEE SUPER FUND A/C> | 103000 | 0.01 | % | 100,150 | 2,850 | 0.00 | % | |||||||||||||
MRS ANNETTE PATRICIA RICHARDS | 103000 | 0.01 | % | 100,150 | 2,850 | 0.00 | % | |||||||||||||
NATASHA JAN BULLOCK | 100000 | 0.01 | % | 100,000 | - | 0.00 | % | |||||||||||||
SAMANTHA ANN STEWART | 100000 | 0.01 | % | 100,000 | - | 0.00 | % | |||||||||||||
MACDONALD ASSET CONSULTING PTY LTD <LUTRY SUPER FUND A/C> | 99000 | 0.01 | % | 99,000 | - | 0.00 | % | |||||||||||||
MS ROBYN HARRIS & ROBYN LYNETTE PTY LTD <ROBYN LYNETTE SUPER FUND A/C> | 98446 | 0.01 | % | 98,446 | - | 0.00 | % | |||||||||||||
MR MARK CROHAN & MRS JACINTA CROHAN | 98100 | 0.01 | % | 98,100 | - | 0.00 | % | |||||||||||||
MS LOIS CLOSTER | 98096 | 0.01 | % | 98,096 | - | 0.00 | % | |||||||||||||
MS SALLYANNE FLORENCE & MS GINA LOUISE FLORENCE | 98096 | 0.01 | % | 98,096 | - | 0.00 | % | |||||||||||||
MR ALBERT ANTHONY MACRI | 98096 | 0.01 | % | 98,096 | - | 0.00 | % | |||||||||||||
K O NOMINEES PTY LTD <THE OLDFIELD KNOTT UNIT A/C> | 95237 | 0.01 | % | 95,237 | - | 0.00 | % | |||||||||||||
MS SANDRA FAY LOCK | 93932 | 0.01 | % | 93,932 | - | 0.00 | % | |||||||||||||
DELMARIE FLORENCE | 93924 | 0.01 | % | 93,924 | - | 0.00 | % | |||||||||||||
MR GRANT DONALD PETERSON & MRS CHRISTINE MYRTLE LANE <PETERSON FAMILY A/C> | 93282 | 0.00 | % | 93,282 | - | 0.00 | % | |||||||||||||
MR SCOTT HORNBY | 90852 | 0.00 | % | 90,852 | - | 0.00 | % | |||||||||||||
MR ANTHONY TACCONE | 89920 | 0.00 | % | 89,920 | - | 0.00 | % | |||||||||||||
MR AUGUSTO TACCONE | 89920 | 0.00 | % | 89,920 | - | 0.00 | % | |||||||||||||
MS LIDIA TACCONE | 89920 | 0.00 | % | 89,920 | - | 0.00 | % | |||||||||||||
HANSENS AMAZING TEAM PTY LTD <LOANS NO 3 A/C> | 88931 | 0.00 | % | 88,931 | - | 0.00 | % | |||||||||||||
MR JOHN STEPHEN FRY | 87150 | 0.00 | % | 87,150 | - | 0.00 | % | |||||||||||||
MR DAVID BESSON & MRS LIZ BESSON <BESSON & BESSON A/C> | 85834 | 0.00 | % | 85,834 | - | 0.00 | % | |||||||||||||
MR JAMES FARMER & NICJAM PTY LTD <FARMER FAMILY SETTLEMENT A/C> | 85716 | 0.00 | % | 85,716 | - | 0.00 | % | |||||||||||||
MR CHRISTOPHER BERNARD OLDFIELD | 84895 | 0.00 | % | 84,895 | - | 0.00 | % | |||||||||||||
MR ZORAN MATIC | 84675 | 0.00 | % | 84,675 | - | 0.00 | % | |||||||||||||
FIFTH GLENMAR PTY LTD | 82547 | 0.00 | % | 82,547 | - | 0.00 | % | |||||||||||||
MRS JUDY ELIZABETH GREEN | 81287 | 0.00 | % | 81,287 | - | 0.00 | % | |||||||||||||
MR DOMINIC CURCIO | 80534 | 0.00 | % | 80,534 | - | 0.00 | % | |||||||||||||
MR GEOFFREY WALLIS ARUNDELL | 79716 | 0.00 | % | 79,716 | - | 0.00 | % | |||||||||||||
SHEETMETAL INSTALLATIONS PTY LTD <SHEETMETAL STAFF S/F A/C> | 77659 | 0.00 | % | 77,659 | - | 0.00 | % | |||||||||||||
MR MICHAEL JOSEPH MCCANN <MCCANN SMSF PTY LTD A/C> | 76842 | 0.00 | % | 76,842 | - | 0.00 | % | |||||||||||||
MR RICK OLARENSHAW <214 GRAHAM STREET A/C> | 75334 | 0.00 | % | 75,334 | - | 0.00 | % | |||||||||||||
MR RICHARD ARTHUR POWELL | 75247 | 0.00 | % | 75,247 | - | 0.00 | % | |||||||||||||
MR CHRISTOPHER HORACE ALDRIDGE & MRS GERALDINE ALDRIDGE <RELYON TRADING S/F A/C> | 73572 | 0.00 | % | 73,572 | - | 0.00 | % |
47 |
48 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MS JANIS ROWELL | 61566 | 0.00 | % | 61,566 | - | 0.00 | % | |||||||||||||
MR LAURANCE SIDARI <BENJAMIN SIDARI A/C> | 61566 | 0.00 | % | 61,566 | - | 0.00 | % | |||||||||||||
MR LAURANCE SIDARI <BRIANA SIDARI A/C> | 61566 | 0.00 | % | 61,566 | - | 0.00 | % | |||||||||||||
MS BEATRICE SIDARI | 61566 | 0.00 | % | 61,566 | - | 0.00 | % | |||||||||||||
VICROY PTY LTD <BENSON FAMILY A/C> | 61566 | 0.00 | % | 61,566 | - | 0.00 | % | |||||||||||||
HOME LOAN ESSENTIALS PTY LTD <CAMERON D PERKINS S/F A/C> | 61433 | 0.00 | % | 61,433 | - | 0.00 | % | |||||||||||||
ASHLEY HUDSON | 61310 | 0.00 | % | 61,310 | - | 0.00 | % | |||||||||||||
OURCLAN PTY LTD | 61310 | 0.00 | % | 61,310 | - | 0.00 | % | |||||||||||||
MR GEOFF SULLIVAN & MRS PAM SULLIVAN <SULLIVAN SUPER FUND A/C> | 61310 | 0.00 | % | 61,310 | - | 0.00 | % | |||||||||||||
MR TRAVIS PHILP CHERRY & MRS LOUISE CHERRY <TJP INDUSTRIES S/FUND A/C> | 58860 | 0.00 | % | 58,860 | - | 0.00 | % | |||||||||||||
SOBECCA PTY LTD <SOBECCA A/C> | 58245 | 0.00 | % | 58,245 | - | 0.00 | % | |||||||||||||
MR JOHN TURNBULL & MRS GOI TURNBULL <JOHN & GOI'S S/F A/C> | 57831 | 0.00 | % | 57,831 | - | 0.00 | % | |||||||||||||
ROSBEE MANOR PTY LTD <TWIGG PROPERTY UNIT A/C> | 55239 | 0.00 | % | 55,239 | - | 0.00 | % | |||||||||||||
PAINT A RAINBOW FOUNDATION LIMITED | 55179 | 0.00 | % | 55,179 | - | 0.00 | % | |||||||||||||
MS TRICIA ANN LACEY <CJM FAM & BENSON & VICROY AC> | 54711 | 0.00 | % | 54,711 | - | 0.00 | % | |||||||||||||
MR PAUL FRANCIS FONTAINE | 54632 | 0.00 | % | 54,632 | - | 0.00 | % | |||||||||||||
BRIAN MARTIN & ASSOCIATES PTY LTD <BRIAN MARTIN S/F A/C> | 54000 | 0.00 | % | 54,000 | - | 0.00 | % | |||||||||||||
MS NOELA VALENTINE BROOKS | 53896 | 0.00 | % | 53,896 | - | 0.00 | % | |||||||||||||
MR ANTHONY HOUSTON <HOUSTON SUPER FUND A/C> | 53250 | 0.00 | % | 53,250 | - | 0.00 | % | |||||||||||||
MR BRIAN MARTIN <BRIAN MARTIN SUPER FUND A/C> | 51875 | 0.00 | % | 51,875 | - | 0.00 | % | |||||||||||||
MISS SKYE PARKER | 51541 | 0.00 | % | 51,541 | - | 0.00 | % | |||||||||||||
MS VIRGINIA DALZOTTO | 51506 | 0.00 | % | 51,506 | - | 0.00 | % | |||||||||||||
MR TERRY JAMES GARDINER | 51477 | 0.00 | % | 51,477 | - | 0.00 | % | |||||||||||||
MR SAMMAR SOUSOU | 51250 | 0.00 | % | 51,250 | - | 0.00 | % | |||||||||||||
NYCOR SUPER PTY LTD <NYCOR ENGINEERING S/F A/C> | 50935 | 0.00 | % | 50,935 | - | 0.00 | % | |||||||||||||
MR DARYL ROSS WALDRON & MRS ANNE MOREE WALDRON <THE WALDRON FUND A/C> | 50157 | 0.00 | % | 50,157 | - | 0.00 | % | |||||||||||||
DIRECT MOTORS PTY LTD <DIRECT MOTORS S/F A/C> | 49755 | 0.00 | % | 49,755 | - | 0.00 | % | |||||||||||||
ASHLAND ENTERPRISES PTY LTD | 49527 | 0.00 | % | 49,527 | - | 0.00 | % | |||||||||||||
MR NEIL DENIS PORTER & MS JUDITH PEARCE | 49048 | 0.00 | % | 49,048 | - | 0.00 | % | |||||||||||||
MR DARREN PUTLAND & JAXLAND PTY LTD <PUTLAND FAMILY A/C> | 49048 | 0.00 | % | 49,048 | - | 0.00 | % | |||||||||||||
MRS VICTORIA ALEXANDRA ROSE & MR GREGORY JOHN ROSE <ROSE FAMILY SUPER FUND A/C> | 49048 | 0.00 | % | 49,048 | - | 0.00 | % | |||||||||||||
MR TERRY ROTH | 49048 | 0.00 | % | 49,048 | - | 0.00 | % | |||||||||||||
MR BRIAN ANDREW SMITH | 49048 | 0.00 | % | 49,048 | - | 0.00 | % | |||||||||||||
VARDY INVESTMENT PTY LTD <VARDY I Q A/C> | 49048 | 0.00 | % | 49,048 | - | 0.00 | % | |||||||||||||
MRS CARLY JANE WARD & MR SEAN MERVYN WARD <THE SCW INVESTMENT A/C> | 49048 | 0.00 | % | 49,048 | - | 0.00 | % | |||||||||||||
ROSHCO INVESTMENTS PTY LTD <RAPCO FAMILY SUPER FUND A/C> | 48000 | 0.00 | % | 48,000 | - | 0.00 | % | |||||||||||||
MS ELISA CHIANDOTTO | 47816 | 0.00 | % | 47,816 | - | 0.00 | % | |||||||||||||
MRS FRANCES LAMBERT | 47620 | 0.00 | % | 47,620 | - | 0.00 | % | |||||||||||||
MR HOWARD ROSS & MRS MARTHA ROSS <H & M ROSS RETIRE FUND A/C> | 47034 | 0.00 | % | 47,034 | - | 0.00 | % | |||||||||||||
MR JOHN BEVAN MUTCH | 45525 | 0.00 | % | 45,525 | - | 0.00 | % |
49 |
50 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR GRANT ALAN TURNER <THE TURNER SUPER FUND A/C> | 35035 | 0.00 | % | 35,035 | - | 0.00 | % | |||||||||||||
MRS LIZ BESSON | 34988 | 0.00 | % | 34,988 | - | 0.00 | % | |||||||||||||
MS NICOLE MARIE MERDY | 34550 | 0.00 | % | 34,550 | - | 0.00 | % | |||||||||||||
MR ROBERT VAN BLANKEN & MRS LYNDA GAY VAN BLANKEN | 33964 | 0.00 | % | 33,964 | - | 0.00 | % | |||||||||||||
MRS ANDREA KIRSTAN TURNER | 33832 | 0.00 | % | 33,832 | - | 0.00 | % | |||||||||||||
MR IAN BERNARD OLDFIELD | 33726 | 0.00 | % | 33,726 | - | 0.00 | % | |||||||||||||
DAWN, GEORGE <NEWCRED PTY LTD A/C> | 33401 | 0.00 | % | 33,401 | - | 0.00 | % | |||||||||||||
MRS KAREN GODDARD | 33317 | 0.00 | % | 33,317 | - | 0.00 | % | |||||||||||||
MRS SALLY RILLSTONE & MR DOMINIC RILLSTONE | 33000 | 0.00 | % | 33,000 | - | 0.00 | % | |||||||||||||
MR RYAN PAUL KRIKKE | 32821 | 0.00 | % | 32,821 | - | 0.00 | % | |||||||||||||
MR LUIGI PANUCCIO & MRS ANTONELLA PANUCCIO <LAP SUPERANNUATION FUND A/C> | 32753 | 0.00 | % | 32,753 | - | 0.00 | % | |||||||||||||
MR GEOFF WHITTOME & MRS LEONIE WHITTOME <OCEAN EDGE HOLDINGS P/L A/C> | 32377 | 0.00 | % | 32,377 | - | 0.00 | % | |||||||||||||
MR ROWAN WILLIAMS | 32180 | 0.00 | % | 32,180 | - | 0.00 | % | |||||||||||||
MS SKYE ERIN PARKER | 32044 | 0.00 | % | 32,044 | - | 0.00 | % | |||||||||||||
MS LANA THOMPSON <LANA THOMPSON SUPER FUND A/C> | 31724 | 0.00 | % | 31,724 | - | 0.00 | % | |||||||||||||
MS WILHELMINA HENDERINA PRUYN & MR DANIEL JOHN GARLICK | 31534 | 0.00 | % | 31,534 | - | 0.00 | % | |||||||||||||
MS CATHERINE BADDOCK | 31500 | 0.00 | % | 31,500 | - | 0.00 | % | |||||||||||||
MR DAVID JOHN GRANTHAM | 31350 | 0.00 | % | 31,350 | - | 0.00 | % | |||||||||||||
MRS PHYLLIS JEAN BILSTON | 31212 | 0.00 | % | 31,212 | - | 0.00 | % | |||||||||||||
MR JASON HAWORTH | 31000 | 0.00 | % | 31,000 | - | 0.00 | % | |||||||||||||
MR ERNEST PETER OLDFIELD | 30783 | 0.00 | % | 30,783 | - | 0.00 | % | |||||||||||||
RESWICK PTY LTD <NEVILLE PARTON S/FUND A/C> | 30717 | 0.00 | % | 30,717 | - | 0.00 | % | |||||||||||||
MR DOMINIC JOHN CURCIO | 30655 | 0.00 | % | 30,655 | - | 0.00 | % | |||||||||||||
MR GREG GIARRATANA & MRS BRIGINA GIARRATANA <G & B GIARRATANA A/C> | 30655 | 0.00 | % | 30,655 | - | 0.00 | % | |||||||||||||
MR ALBERT ANTHONY MACRI & EST JANICE VERA MACRI | 30655 | 0.00 | % | 30,655 | - | 0.00 | % | |||||||||||||
SHANDAN TRADING PTY LTD <THE SHANDAN TRADING A/C> | 30586 | 0.00 | % | 30,586 | - | 0.00 | % | |||||||||||||
JOHN & WENDY CAMPBELL | 30530 | 0.00 | % | 30,530 | - | 0.00 | % | |||||||||||||
MR HOWARD GARNET DIXON <GARNET SUPER FUND A/C> | 30395 | 0.00 | % | 30,395 | - | 0.00 | % | |||||||||||||
MR JOHN ROYALL | 30164 | 0.00 | % | 30,164 | - | 0.00 | % | |||||||||||||
MRS NOLA WARREN & MR MALCOLM WARREN | 30000 | 0.00 | % | 30,000 | - | 0.00 | % | |||||||||||||
MS PAMELA YOUNG | 29432 | 0.00 | % | 29,432 | - | 0.00 | % | |||||||||||||
BRICKS AND MORTAR INVESTMENTS PTY LTD <MCELLIGOTT S/FUND NO 2 A/C> | 29429 | 0.00 | % | 29,429 | - | 0.00 | % | |||||||||||||
DIMITRA THANOPOULOS | 29429 | 0.00 | % | 29,429 | - | 0.00 | % | |||||||||||||
MR MELVYN STUART HORNBY | 29361 | 0.00 | % | 29,361 | - | 0.00 | % | |||||||||||||
LEE ANNETTE , KLAVERSTYN | 29299 | 0.00 | % | 29,299 | - | 0.00 | % | |||||||||||||
L GORDON NOMINEES PTY LTD | 29160 | 0.00 | % | 29,160 | - | 0.00 | % | |||||||||||||
MS LEANNE ASKER | 28836 | 0.00 | % | 28,836 | - | 0.00 | % | |||||||||||||
PILLAR NOMINEES PTY LTD <SUPER FUND A/C> | 28612 | 0.00 | % | 28,612 | - | 0.00 | % |
51 |
52 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
DOROTHY JEAN, ELLIS < THE D ELLIS SUPER FUND> | 21974 | 0.00 | % | 21,974 | - | 0.00 | % | |||||||||||||
KEITH EDWARD, KIMBER | 21974 | 0.00 | % | 21,974 | - | 0.00 | % | |||||||||||||
RAYMOND & BRENDA,CRAWSHAW | 21974 | 0.00 | % | 21,974 | - | 0.00 | % | |||||||||||||
STEPHEN, MOFFATT | 21974 | 0.00 | % | 21,974 | - | 0.00 | % | |||||||||||||
WILLIAM,FRASER | 21974 | 0.00 | % | 21,974 | - | 0.00 | % | |||||||||||||
MS RAYNI NUGENT | 21727 | 0.00 | % | 21,727 | - | 0.00 | % | |||||||||||||
MR JOHN ADNAMS & MRS ELIZABETH ADNAMS <ADNAMS SUPER FUND A/C> | 21681 | 0.00 | % | 21,681 | - | 0.00 | % | |||||||||||||
MR WAYNE CONNELL <CONNELL FAMILY S/FUND A/C> | 21514 | 0.00 | % | 21,514 | - | 0.00 | % | |||||||||||||
MR GEOFFREY L HARDIE & MRS SUSAN L HARDIE | 21429 | 0.00 | % | 21,429 | - | 0.00 | % | |||||||||||||
MRS LORRAINE JOYCE MAHONY | 21406 | 0.00 | % | 21,406 | - | 0.00 | % | |||||||||||||
MR ASHLEY HUDSON | 21294 | 0.00 | % | 21,294 | - | 0.00 | % | |||||||||||||
MR PETER GERRIT KRIKKE | 21275 | 0.00 | % | 21,275 | - | 0.00 | % | |||||||||||||
MR ANGUS PYKE | 21000 | 0.00 | % | 21,000 | - | 0.00 | % | |||||||||||||
ASHLAND ENTERPRISES PTY LTD <THE CALLIS SUPER FUND A/C> | 20961 | 0.00 | % | 20,961 | - | 0.00 | % | |||||||||||||
P J, KEARNEY <PJ KEARNEY SUPER FUND > | 20509 | 0.00 | % | 20,509 | - | 0.00 | % | |||||||||||||
DONALD & SUSAN FAIRBROTHER <FAIRBROTHER FAMILY TRUST> | 20509 | 0.00 | % | 20,509 | - | 0.00 | % | |||||||||||||
KENNETH & MARY JOY, POLS | 20509 | 0.00 | % | 20,509 | - | 0.00 | % | |||||||||||||
BRETT VAUGHAN, RAMSEY | 20509 | 0.00 | % | 20,509 | - | 0.00 | % | |||||||||||||
GREENLAND NOMINEES PTY LTD <BRUCE GREENLAND S/FUND A/C> | 20437 | 0.00 | % | 20,437 | - | 0.00 | % | |||||||||||||
MR PAUL RICHARD HILLS | 20437 | 0.00 | % | 20,437 | - | 0.00 | % | |||||||||||||
MR HARRY FRANS MECHIELSEN & MRS RIA MECHIELSEN <HF MECHIELSEN S/F A/C> | 20437 | 0.00 | % | 20,437 | - | 0.00 | % | |||||||||||||
MR DAVID HENRY SCOTT & MRS LARRAINE SCOTT <DAVLAR SERVICES P/L S/F A/C> | 20437 | 0.00 | % | 20,437 | - | 0.00 | % | |||||||||||||
U S DEVELOPMENTS PTY LIMITED | 20437 | 0.00 | % | 20,437 | - | 0.00 | % | |||||||||||||
MR CAMPBELL BLACK | 20375 | 0.00 | % | 20,375 | - | 0.00 | % | |||||||||||||
MR WILLIAM BARRYMORE SMITH | 19778 | 0.00 | % | 19,778 | - | 0.00 | % | |||||||||||||
ASCENDANT SC PTY LTD <ASCENDANT A/C> | 19620 | 0.00 | % | 19,620 | - | 0.00 | % | |||||||||||||
MR RICHARD BERGMANN & MRS KIM BERGMANN <KIRIS FAMILY A/C> | 19620 | 0.00 | % | 19,620 | - | 0.00 | % | |||||||||||||
MR DANIEL RILEY & MRS NATASHA RILEY <LES BICOUNETS A/C> | 19620 | 0.00 | % | 19,620 | - | 0.00 | % | |||||||||||||
MR ALAN YOUNG | 19620 | 0.00 | % | 19,620 | - | 0.00 | % | |||||||||||||
MR BEN YOUNG & MR ALAN YOUNG <B YOUNG SUPER FUND A/C> | 19620 | 0.00 | % | 19,620 | - | 0.00 | % | |||||||||||||
MR MICHAEL ROGER PEARS | 19538 | 0.00 | % | 19,538 | - | 0.00 | % | |||||||||||||
MS LANA THOMPSON | 19225 | 0.00 | % | 19,225 | - | 0.00 | % | |||||||||||||
MRS KAREN MARIA LA FRENTZ | 19170 | 0.00 | % | 19,170 | - | 0.00 | % | |||||||||||||
MR CLAUDE HUMBERTO CONCHA | 19132 | 0.00 | % | 19,132 | - | 0.00 | % | |||||||||||||
MRS ELIZABETH FLINTOFT | 19048 | 0.00 | % | 19,048 | - | 0.00 | % | |||||||||||||
ALAN, BURNS | 19044 | 0.00 | % | 19,044 | - | 0.00 | % | |||||||||||||
ATLANTIC CHALLENGE PTY LTD <PETER MCDONALD S/F A/C> | 18750 | 0.00 | % | 18,750 | - | 0.00 | % | |||||||||||||
BLUE MOON CABINS PTY LTD <THE WEST FAMILY A/C> | 18750 | 0.00 | % | 18,750 | - | 0.00 | % | |||||||||||||
MR VITO CHIARAVELLE & MRS ANTIONIETTA CHIARAVELLE | 18750 | 0.00 | % | 18,750 | - | 0.00 | % | |||||||||||||
MR HANNA NAJIB SOUSOU | 18750 | 0.00 | % | 18,750 | - | 0.00 | % | |||||||||||||
MNE-LONGTIME PTY LTD <MNE FAMILY SUPERFUND A/C> | 18700 | 0.00 | % | 18,700 | - | 0.00 | % |
53 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR MALCOLM ANDREW WARREN & MRS NOLA JOY WARREN <WARREN FAMILY SUPER FUND A/C> | 18500 | 0.00 | % | 18,500 | - | 0.00 | % | |||||||||||||
MR GERHARDUS JOHANNES NEL & MRS HILARY NEL <GEORGE NEL SUPER FUND A/C> | 18396 | 0.00 | % | 18,396 | - | 0.00 | % | |||||||||||||
MR ALLEN CHARLES BRITTIAN | 18393 | 0.00 | % | 18,393 | - | 0.00 | % | |||||||||||||
MR ROBERT BURNS & MRS JULIE BURNS | 18086 | 0.00 | % | 18,086 | - | 0.00 | % | |||||||||||||
MRS CHRISTINE ANN GILMOUR | 18042 | 0.00 | % | 18,042 | - | 0.00 | % | |||||||||||||
MR WAYNE WHITMORE & MRS LISA WHITMORE | 17657 | 0.00 | % | 17,657 | - | 0.00 | % | |||||||||||||
MR RUSSEL VAN ROOYEN & MRS STARLING VAN ROOYEN <VAN ROOYEN SUPER FUND A/C> | 17519 | 0.00 | % | 17,519 | - | 0.00 | % | |||||||||||||
MR TONY JORDAN & MS DENISE MURPHY <JORDAN MURPHY FAMILY A/C> | 17518 | 0.00 | % | 17,518 | - | 0.00 | % | |||||||||||||
MS MADELINE KENNEDY | 17518 | 0.00 | % | 17,518 | - | 0.00 | % | |||||||||||||
WA TRUCK & MACHINERY REPAIRS PTY LTD <WA TRUCK NO2 SUPER FUND A/C> | 17518 | 0.00 | % | 17,518 | - | 0.00 | % | |||||||||||||
MR PETER MILAS | 16978 | 0.00 | % | 16,978 | - | 0.00 | % | |||||||||||||
MR PETER COX | 16905 | 0.00 | % | 16,905 | - | 0.00 | % | |||||||||||||
MR SAVERINO SALEMI & MRS WANDA SALEMI | 16797 | 0.00 | % | 16,797 | - | 0.00 | % | |||||||||||||
ANGUS KELLY & KATRINA KELLY <A & K KELLY FAMILY A/C> | 16781 | 0.00 | % | 16,781 | - | 0.00 | % | |||||||||||||
BARRY FREDERICK G & DEANNE I A, LISTER | 16700 | 0.00 | % | 16,700 | - | 0.00 | % | |||||||||||||
LEN,MACLEAN <MACLEAN BUNGAY-FRITH A/C> | 16369 | 0.00 | % | 16,369 | - | 0.00 | % | |||||||||||||
MR DAVID MICHAEL BOTHE & MRS BELINDA CAROLINE BOTHE | 16350 | 0.00 | % | 16,350 | - | 0.00 | % | |||||||||||||
TOSIN CAPITAL PTY LTD <VIATICUS A/C> | 16350 | 0.00 | % | 16,350 | - | 0.00 | % | |||||||||||||
DIRECT MOTORS PTY LTD <DIRECT MOTORS SUPER FUND A/C> | 16011 | 0.00 | % | 16,011 | - | 0.00 | % | |||||||||||||
MARISHANE PTY LTD <HERITAGE SUPER FUND A/C> | 15874 | 0.00 | % | 15,874 | - | 0.00 | % | |||||||||||||
MR RUSSELL WOODROW | 15674 | 0.00 | % | 15,674 | - | 0.00 | % | |||||||||||||
MR RONALD D KEECH & MRS KATHRYN KEECH | 15652 | 0.00 | % | 15,652 | - | 0.00 | % | |||||||||||||
MS STACY EVERINGHAM | 15489 | 0.00 | % | 15,489 | - | 0.00 | % | |||||||||||||
MR JOHN DOMINIC TOIGO & MRS FIONA TOIGO <TOIGO SUPER FUND A/C> | 15328 | 0.00 | % | 15,328 | - | 0.00 | % | |||||||||||||
MRS LEE ANNETTE KLAVERSTYN | 15196 | 0.00 | % | 15,196 | - | 0.00 | % | |||||||||||||
MR. JOHN MOFFATT | 15186 | 0.00 | % | 15,186 | - | 0.00 | % | |||||||||||||
MR IAN WILLIAM FOSTER & MRS DENISE MONICA FOSTER <FOSTER SUPER FUND A/C> | 15142 | 0.00 | % | 15,142 | - | 0.00 | % | |||||||||||||
MR JOHN BRUMTIS | 15000 | 0.00 | % | 15,000 | - | 0.00 | % | |||||||||||||
BUTLER BRAY CONSULTING PTY LTD | 15000 | 0.00 | % | 15,000 | - | 0.00 | % | |||||||||||||
MR GERARD PATRICK CONSEDINE <CONSEDINE SUPER FUND A/C> | 15000 | 0.00 | % | 15,000 | - | 0.00 | % | |||||||||||||
MR DANIEL O'CONNOR & MRS TIFFNNY O'CONNOR <SUPER FUND A/C> | 15000 | 0.00 | % | 15,000 | - | 0.00 | % | |||||||||||||
MS JODIE MARGARET TALONE | 15000 | 0.00 | % | 15,000 | - | 0.00 | % | |||||||||||||
DIMITRIA THANOPOULOS | 15000 | 0.00 | % | 15,000 | - | 0.00 | % | |||||||||||||
MRS LISA JANE WARD | 15000 | 0.00 | % | 15,000 | - | 0.00 | % | |||||||||||||
MRS SRIKANTHI WIJETUNGA | 15000 | 0.00 | % | 15,000 | - | 0.00 | % | |||||||||||||
DAVID,PURKIS <PERCHAZ PTY LTD A/C> | 14860 | 0.00 | % | 14,860 | - | 0.00 | % | |||||||||||||
RODNEY, FAGG < RODNEY & JULIE FAGG SUPER FUND> | 14860 | 0.00 | % | 14,860 | - | 0.00 | % | |||||||||||||
MS VANESSA CARBIS | 14716 | 0.00 | % | 14,716 | - | 0.00 | % | |||||||||||||
SOF ANDRIKOPOULOS | 14715 | 0.00 | % | 14,715 | - | 0.00 | % | |||||||||||||
MR GERARD DONALD LAFONTAINE | 14715 | 0.00 | % | 14,715 | - | 0.00 | % | |||||||||||||
MR CHRIS LEEHANE & MRS KAREN LEEHANE | 14715 | 0.00 | % | 14,715 | - | 0.00 | % |
54 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR ALISTAIR LEGGE | 14715 | 0.00 | % | 14,715 | - | 0.00 | % | |||||||||||||
MR JOHN MCELLIGOTT | 14715 | 0.00 | % | 14,715 | - | 0.00 | % | |||||||||||||
MR LIONEL CHARLES FLASHMAN | 14663 | 0.00 | % | 14,663 | - | 0.00 | % | |||||||||||||
ELIZABETH AGNES,CROSS | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
COLIN & GAIL, STRICKLAND < THE C&G STRICKLAND SUPER FUND> | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
DANIELLE L & TONI M & KARLENE J ,KILGOUR | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
DAVID JOHN, PLEDGER C/- WOODWARD NHILL FINANCIAL PLANNING | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
DAVID,TAYLOR <KENOBI SUPER FUND> | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
DOUGLAS & ROSLYN,REID | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
WAYNE EDWARD & LISA, WHITMORE | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
JEFFERIS HODSOLL & ANGELINA ROSALINE, HEATH | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
ROBYN JAYNE, WEST | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
BODO MAX & MARJORIE CLARE,PFAU | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
PAUL MAXWELL & SHELLEY MARIE,FOX | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
THOMAS, HILLARDT | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
RON & CAROL, WILLIAMS | 14650 | 0.00 | % | 14,650 | - | 0.00 | % | |||||||||||||
MR PHILIP DUPRE <PHILIP DUPRE S/F A/C> | 14640 | 0.00 | % | 14,640 | - | 0.00 | % | |||||||||||||
MR ROBERT GEORGE SUGGETT | 14589 | 0.00 | % | 14,589 | - | 0.00 | % | |||||||||||||
MR JOHN NEGHERBON & MRS CARMEL NEGHERBON <J&C INSTALLATIONS PL S/F A/C> | 14553 | 0.00 | % | 14,553 | - | 0.00 | % | |||||||||||||
MR GEOFF HOLMES | 14286 | 0.00 | % | 14,286 | - | 0.00 | % | |||||||||||||
DIVRI PTY LTD <PASC A/C> | 14280 | 0.00 | % | 14,280 | - | 0.00 | % | |||||||||||||
MR GAVIN JAMES BEATTIE | 14185 | 0.00 | % | 14,185 | - | 0.00 | % | |||||||||||||
MR ANDREW PHILIP REEVES <ANDREW REEVES TRADING A/C> | 14185 | 0.00 | % | 14,185 | - | 0.00 | % | |||||||||||||
MR DAVID ALLAN WALLACE | 14014 | 0.00 | % | 14,014 | - | 0.00 | % | |||||||||||||
MRS SIMONE HELENE RHODES CONCHA | 13995 | 0.00 | % | 13,995 | - | 0.00 | % | |||||||||||||
MR BARRY DAVIS | 13969 | 0.00 | % | 13,969 | - | 0.00 | % | |||||||||||||
DONTEK ELECTRONICS PTY LTD | 13846 | 0.00 | % | 13,846 | - | 0.00 | % | |||||||||||||
MR KEITH EDWARD KIMBER | 13802 | 0.00 | % | 13,802 | - | 0.00 | % | |||||||||||||
DAVID J,PRICE | 13352 | 0.00 | % | 13,352 | - | 0.00 | % | |||||||||||||
GARRY, PHIPPS | 13352 | 0.00 | % | 13,352 | - | 0.00 | % | |||||||||||||
MR MARIO PETER POLETTI & MRS GLENYS LESLEY POLETTI | 13334 | 0.00 | % | 13,334 | - | 0.00 | % | |||||||||||||
MR SCOTT GODDARD <SKG SUPER FUND A/C> | 13327 | 0.00 | % | 13,327 | - | 0.00 | % | |||||||||||||
HEATHER DAWN, BURNS | 13185 | 0.00 | % | 13,185 | - | 0.00 | % | |||||||||||||
GWYN, CHAPLAIN | 13185 | 0.00 | % | 13,185 | - | 0.00 | % | |||||||||||||
JOHN, THOMPSON | 13185 | 0.00 | % | 13,185 | - | 0.00 | % | |||||||||||||
NEVELLE, WATERS | 13185 | 0.00 | % | 13,185 | - | 0.00 | % | |||||||||||||
NICOLE M, MERDY | 13185 | 0.00 | % | 13,185 | - | 0.00 | % | |||||||||||||
SUSANA,LAU | 13185 | 0.00 | % | 13,185 | - | 0.00 | % | |||||||||||||
MR JOHN HON MIN CHAU | 13083 | 0.00 | % | 13,083 | - | 0.00 | % | |||||||||||||
MR DAVID RICHARD KUPFER | 12500 | 0.00 | % | 12,500 | - | 0.00 | % | |||||||||||||
MR VINCENZO PENNAZZA & MRS DIANA PENNAZZA | 12461 | 0.00 | % | 12,461 | - | 0.00 | % |
55 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
ALTA BLUE PTY LTD <MCA A/C> | 12262 | 0.00 | % | 12,262 | - | 0.00 | % | |||||||||||||
MRS SOTIRIA BELTON | 12262 | 0.00 | % | 12,262 | - | 0.00 | % | |||||||||||||
MELMICK PTY LTD <MELMICK SUPER FUND A/C> | 12262 | 0.00 | % | 12,262 | - | 0.00 | % | |||||||||||||
MR BARRY NORMAN LAW & MS JENNIFER JOYCE SHEHADEH | 12240 | 0.00 | % | 12,240 | - | 0.00 | % | |||||||||||||
T SHENADAR & J I SHENADAR <NOAH'S ARK SUPER FUND A/C> | 11929 | 0.00 | % | 11,929 | - | 0.00 | % | |||||||||||||
MR DAVID ANDREW HENSLEY | 11734 | 0.00 | % | 11,734 | - | 0.00 | % | |||||||||||||
LINDA-JANE,SHEEDY | 11720 | 0.00 | % | 11,720 | - | 0.00 | % | |||||||||||||
WENDON HOLDINGS PTY LIMITED <WENDON FAMILY PROPERTY A/C> | 11445 | 0.00 | % | 11,445 | - | 0.00 | % | |||||||||||||
MRS DIANE TWIGG C/- PITCHER PARTNERS INVESTMENT SERCICES PTY LTD | 11429 | 0.00 | % | 11,429 | - | 0.00 | % | |||||||||||||
JUPEK PTY LTD | 11411 | 0.00 | % | 11,411 | - | 0.00 | % | |||||||||||||
MRS VANESSA JOAN CARBIS | 11356 | 0.00 | % | 11,356 | - | 0.00 | % | |||||||||||||
MR JOHN CASTLEDINE & MRS DOROTHY CASTLEDINE <CASTLEDINE SUPER FUND A/C> | 11344 | 0.00 | % | 11,344 | - | 0.00 | % | |||||||||||||
MR PETER GEORGE PERKINS & MRS NOELA ANN PERKINS <PETER & NOELA SUPER FUND A/C> | 11325 | 0.00 | % | 11,325 | - | 0.00 | % | |||||||||||||
KENOBI HOLDINGS PTY LTD <KENOBI HOLDINGS A/C> | 11258 | 0.00 | % | 11,258 | - | 0.00 | % | |||||||||||||
CONSEDINE SUPER PTY LTD <CONSEDINE SUPER FUND A/C> | 11250 | 0.00 | % | 11,250 | - | 0.00 | % | |||||||||||||
MR DAVID ANDREW NITSCHKE | 11012 | 0.00 | % | 11,012 | - | 0.00 | % | |||||||||||||
MISS MELISSA CURCIO | 10916 | 0.00 | % | 10,916 | - | 0.00 | % | |||||||||||||
MR ANTHONY PAUL JUDSON | 10834 | 0.00 | % | 10,834 | - | 0.00 | % | |||||||||||||
MRS MARGARET LOUISE BATCHELOR <SEABROOK FAMILY A/C> | 10772 | 0.00 | % | 10,772 | - | 0.00 | % | |||||||||||||
MR BODO MAX PFAU & MRS MARJORIE CLARE PFAU | 10735 | 0.00 | % | 10,735 | - | 0.00 | % | |||||||||||||
CHRISTINE COLLINS CONSULTANCY SERVICES PTY LTD | 10596 | 0.00 | % | 10,596 | - | 0.00 | % | |||||||||||||
MR ANTHONY LUCI & MRS MIREILLE LUCI | 10559 | 0.00 | % | 10,559 | - | 0.00 | % | |||||||||||||
MRS KERRY LYNETTE GREENOP | 10391 | 0.00 | % | 10,391 | - | 0.00 | % | |||||||||||||
MR NICHOLAS USSIA | 10390 | 0.00 | % | 10,390 | - | 0.00 | % | |||||||||||||
MS CAROLYN DOBAY | 10385 | 0.00 | % | 10,385 | - | 0.00 | % | |||||||||||||
ALLAN D & DULCIE MAE, SUTHERLAND | 10255 | 0.00 | % | 10,255 | - | 0.00 | % | |||||||||||||
MR JAMES WILLIAM SMITH <JAMES W SMITH 2 A/C> | 10000 | 0.00 | % | 10,000 | - | 0.00 | % | |||||||||||||
MR DAVID BOOTH & MRS KAY BOOTH | 9810 | 0.00 | % | 9,810 | - | 0.00 | % | |||||||||||||
MR STUART DENMAN & MRS NATASA DENMAN | 9810 | 0.00 | % | 9,810 | - | 0.00 | % | |||||||||||||
MR DAVID MADDEN | 9810 | 0.00 | % | 9,810 | - | 0.00 | % | |||||||||||||
MR SEAN CHRISTOPHER DAVID NUGARA & MRS MICHELLE MARIA NUGARA | 9810 | 0.00 | % | 9,810 | - | 0.00 | % | |||||||||||||
MS TRACEY ANN REILLY | 9810 | 0.00 | % | 9,810 | - | 0.00 | % | |||||||||||||
MS MARIA JOSEPHINE TENNI | 9810 | 0.00 | % | 9,810 | - | 0.00 | % | |||||||||||||
MS POPI ZOGRAFAKIS | 9810 | 0.00 | % | 9,810 | - | 0.00 | % | |||||||||||||
MARK ANTHONY, SPENCE | 9765 | 0.00 | % | 9,765 | - | 0.00 | % | |||||||||||||
MR CAMERON WOODROW | 9524 | 0.00 | % | 9,524 | - | 0.00 | % | |||||||||||||
MR GRANT WOODROW | 9524 | 0.00 | % | 9,524 | - | 0.00 | % | |||||||||||||
MICHELE UNTERFRAUNER | 9375 | 0.00 | % | 9,375 | - | 0.00 | % | |||||||||||||
SYMBIANCE FINANCIAL SERVICES PTY LTD | 9052 | 0.00 | % | 9,052 | - | 0.00 | % | |||||||||||||
MS ATHENA TINA MCBRIDE | 9000 | 0.00 | % | 9,000 | - | 0.00 | % | |||||||||||||
MR GEORGE COSTOPOULOS | 8893 | 0.00 | % | 8,893 | - | 0.00 | % |
56 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR RICHARD ARTHUR POWELL & MRS JANICE DAWN POWELL | 8873 | 0.00 | % | 8,873 | - | 0.00 | % | |||||||||||||
BACKDALE PTY LTD <BACKDALE SUPER FUND> | 8737 | 0.00 | % | 8,737 | - | 0.00 | % | |||||||||||||
MR WILLIAM FRASER & MRS YOLANTA FRASER <MARTA FRASER A/C> | 8584 | 0.00 | % | 8,584 | - | 0.00 | % | |||||||||||||
MR BRETT JOHN WARD & MS DONNA MARIE MULLER <WARD SUPERANNUATION FUND A/C> | 8572 | 0.00 | % | 8,572 | - | 0.00 | % | |||||||||||||
KALPANA RAMANI | 8516 | 0.00 | % | 8,516 | - | 0.00 | % | |||||||||||||
MAHINDRA RAMANI | 8516 | 0.00 | % | 8,516 | - | 0.00 | % | |||||||||||||
STRANGE TECHNOLOGY PTY LIMITED | 8500 | 0.00 | % | 8,500 | - | 0.00 | % | |||||||||||||
MRTREVOR STEPHEN CLOVER & MRS CAROLE ELIZABETH CLOVER | 8478 | 0.00 | % | 8,478 | - | 0.00 | % | |||||||||||||
CLIFFORD & JOY , WIELAND | 8350 | 0.00 | % | 8,350 | - | 0.00 | % | |||||||||||||
MRS LINDA-JANE SHEEDY | 8296 | 0.00 | % | 8,296 | - | 0.00 | % | |||||||||||||
MR ANTHONY KOOY & MRS ABIGAIL KOOY <A & A KOOY SUPER FUND A/C> | 8284 | 0.00 | % | 8,284 | - | 0.00 | % | |||||||||||||
MR SEAN MERVYN WARD & MRS CARLY JANE WARD | 8276 | 0.00 | % | 8,276 | - | 0.00 | % | |||||||||||||
MRS LISETTE MARIE CALLIS TONY CALLIS DENTAL SURGERY | 8175 | 0.00 | % | 8,175 | - | 0.00 | % | |||||||||||||
MR ROB VERKAIK & MRS ELIZABETH JOHANNA VERKAIK <VERKAIK SUPER FUND A/C> | 8175 | 0.00 | % | 8,175 | - | 0.00 | % | |||||||||||||
MS HELEN WALSTAB | 8025 | 0.00 | % | 8,025 | - | 0.00 | % | |||||||||||||
SEAN'S ELECTRICAL PTY LTD | 8000 | 0.00 | % | 8,000 | - | 0.00 | % | |||||||||||||
MR DON FAIRBROTHER & MRS SUSAN FAIRBROTHER <FAIRBROTHER FAMILY A/C> | 7840 | 0.00 | % | 7,840 | - | 0.00 | % | |||||||||||||
ALDEBARAN ENTERPRISES PTY LTD | 7752 | 0.00 | % | 7,752 | - | 0.00 | % | |||||||||||||
MR JOHN THOMPSON | 7650 | 0.00 | % | 7,650 | - | 0.00 | % | |||||||||||||
MR MARK RAYMOND LIDDLE | 7620 | 0.00 | % | 7,620 | - | 0.00 | % | |||||||||||||
MR JOHN THOMPSON & MRS ROSEMARY ELIZABETH THOMPSON | 7603 | 0.00 | % | 7,603 | - | 0.00 | % | |||||||||||||
MR GARRY JOHN MCLEOD & MRS ROBYN JOANNE MCLEOD <FELSWHEEL P/L EMP S/F A/C> | 7580 | 0.00 | % | 7,580 | - | 0.00 | % | |||||||||||||
FEDELTA PTY LIMITED <D & H MILLS FAMILY A/C> | 7550 | 0.00 | % | 7,550 | - | 0.00 | % | |||||||||||||
ALLAN D, FOX <GOOD NEWS MARKETING P/L A/C> | 7536 | 0.00 | % | 7,536 | - | 0.00 | % | |||||||||||||
TURNATON PTY LTD <TURNATON SUPER FUND A/C> | 7511 | 0.00 | % | 7,511 | - | 0.00 | % | |||||||||||||
AVANTEOS INVESTMENTS LIMITED <SYMETRY DELEGATES A/C> | 7500 | 0.00 | % | 7,500 | - | 0.00 | % | |||||||||||||
MRS ELIZABETH ALISON THUAN & MR NGUYEN KHAC THUAN | 7500 | 0.00 | % | 7,500 | - | 0.00 | % | |||||||||||||
SKYLARK INVESTMENT PTY LTD <SKYLARK FAMILY A/C> | 7474 | 0.00 | % | 7,474 | - | 0.00 | % | |||||||||||||
SUPERB HOLDINGS PTY LTD <SUPERB A/C> | 7419 | 0.00 | % | 7,419 | - | 0.00 | % | |||||||||||||
MR CHRIS BERGAMIN | 7358 | 0.00 | % | 7,358 | - | 0.00 | % | |||||||||||||
DIVRI PTY LTD | 7358 | 0.00 | % | 7,358 | - | 0.00 | % | |||||||||||||
JORDAN MURPHY PTY LTD <JORDAN MURPHY FAMILY A/C> | 7358 | 0.00 | % | 7,358 | - | 0.00 | % | |||||||||||||
MS MARY TZIKAS | 7358 | 0.00 | % | 7,358 | - | 0.00 | % | |||||||||||||
MS TANYA TZIKAS | 7358 | 0.00 | % | 7,358 | - | 0.00 | % | |||||||||||||
ROS, SHAW | 7325 | 0.00 | % | 7,325 | - | 0.00 | % | |||||||||||||
BARRY ALAN, ELMS | 7325 | 0.00 | % | 7,325 | - | 0.00 | % | |||||||||||||
ANDREW & STAMATIA, ANTHONY <AA &A ANTHONY SUPER FUND> | 7325 | 0.00 | % | 7,325 | - | 0.00 | % | |||||||||||||
MARJORIE CAROLE, HUDSON | 7325 | 0.00 | % | 7,325 | - | 0.00 | % | |||||||||||||
MARJORIE CAROLE & REDVERS JOHN, HUDSON | 7325 | 0.00 | % | 7,325 | - | 0.00 | % | |||||||||||||
CORINNE,SUETIN | 7325 | 0.00 | % | 7,325 | - | 0.00 | % | |||||||||||||
DAVID,PURKIS | 7325 | 0.00 | % | 7,325 | - | 0.00 | % |
57 |
58 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
DR ROBIN LORRAINE AMERENA | 6663 | 0.00 | % | 6,663 | - | 0.00 | % | |||||||||||||
MR BRETT VAUGHAN RAMSEY | 6609 | 0.00 | % | 6,609 | - | 0.00 | % | |||||||||||||
MS SARAH KATE HARRIS | 6540 | 0.00 | % | 6,540 | - | 0.00 | % | |||||||||||||
WD & J CLARKE PTY LTD <WARWICK CLARKE FAMILY A/C> | 6438 | 0.00 | % | 6,438 | - | 0.00 | % | |||||||||||||
MR JOHN O'DONOHUE & MRS CAROLYN O'DONOHUE | 6418 | 0.00 | % | 6,418 | - | 0.00 | % | |||||||||||||
MS REBECCA CAVANAGH | 6377 | 0.00 | % | 6,377 | - | 0.00 | % | |||||||||||||
MR NICHOLAS HARRINGTON | 6350 | 0.00 | % | 6,350 | - | 0.00 | % | |||||||||||||
MR RUSSEL ANTHONY VAN ROOYEN & MRS STARLING JEAN VAN ROOYEN <VAN ROOYEN SUPER FUND A/C> | 6334 | 0.00 | % | 6,334 | - | 0.00 | % | |||||||||||||
MS ELIZABETH AGNES CROSS | 6298 | 0.00 | % | 6,298 | - | 0.00 | % | |||||||||||||
TURNATON PTY LTD <TURNATON SUPER FUND> C/-HANSENS ACCOUNTANTS PTY LTD | 6270 | 0.00 | % | 6,270 | - | 0.00 | % | |||||||||||||
MR RONALD NICHOLSON | 6250 | 0.00 | % | 6,250 | - | 0.00 | % | |||||||||||||
MR SIMON GORDON MANNING | 6227 | 0.00 | % | 6,227 | - | 0.00 | % | |||||||||||||
MR ROBERT CHARLES WALTERS & MRS MARY ANN WALTERS | 6075 | 0.00 | % | 6,075 | - | 0.00 | % | |||||||||||||
MS JUDITH PEARCE | 6052 | 0.00 | % | 6,052 | - | 0.00 | % | |||||||||||||
MR ROGER ANTHONY WATTS & MRS JULIE DEIRDRE WATTS <CATCHPENNY SUPER FUND A/C> | 6050 | 0.00 | % | 6,050 | - | 0.00 | % | |||||||||||||
TODD DARREN,BOYCE | 6027 | 0.00 | % | 6,027 | - | 0.00 | % | |||||||||||||
MICHEAL ROGER,PEARS | 6027 | 0.00 | % | 6,027 | - | 0.00 | % | |||||||||||||
LIVIANA FORZA | 6000 | 0.00 | % | 6,000 | - | 0.00 | % | |||||||||||||
MR ALFRED AZZOPARDI | 5978 | 0.00 | % | 5,978 | - | 0.00 | % | |||||||||||||
MS ANTONIA AZZOPARDI | 5978 | 0.00 | % | 5,978 | - | 0.00 | % | |||||||||||||
MR RODERICK IAN DONALD & MRS SANDRA ELIZABETH DONALD | 5938 | 0.00 | % | 5,938 | - | 0.00 | % | |||||||||||||
BRIAN & VALDA,PHIPPS | 5860 | 0.00 | % | 5,860 | - | 0.00 | % | |||||||||||||
BRUCE, LUDEWIGS <LUDEWIGS RETIREMENT FUND> | 5860 | 0.00 | % | 5,860 | - | 0.00 | % | |||||||||||||
WILLIAM DANIEL , GOLLOP | 5860 | 0.00 | % | 5,860 | - | 0.00 | % | |||||||||||||
CHRISTINE HELEN,KEMP | 5860 | 0.00 | % | 5,860 | - | 0.00 | % | |||||||||||||
JANINE,LAHEY | 5860 | 0.00 | % | 5,860 | - | 0.00 | % | |||||||||||||
KAREN LESLEY & PETER JAMES CRAMP < CRAMP FAMILY SUPER FUND> | 5860 | 0.00 | % | 5,860 | - | 0.00 | % | |||||||||||||
LIONEL,DEWSNAP | 5860 | 0.00 | % | 5,860 | - | 0.00 | % | |||||||||||||
MICK & MAGGIE, ROWLINGSON | 5860 | 0.00 | % | 5,860 | - | 0.00 | % | |||||||||||||
MIKE,STELLER <EADG PTY LTD A/C> | 5860 | 0.00 | % | 5,860 | - | 0.00 | % | |||||||||||||
TEMISTOCOLES, VANIERIS | 5860 | 0.00 | % | 5,860 | - | 0.00 | % | |||||||||||||
MR PAUL CAMPLIN & MRS ELIZABETH CAMPLIN <THE P AND E A/C> | 5758 | 0.00 | % | 5,758 | - | 0.00 | % | |||||||||||||
MR ROGER MARTYN DART <R M DART FAMILY A/C> | 5758 | 0.00 | % | 5,758 | - | 0.00 | % | |||||||||||||
MR PAUL KARGER | 5758 | 0.00 | % | 5,758 | - | 0.00 | % | |||||||||||||
MS IRENE PATRICIA KIMBER | 5715 | 0.00 | % | 5,715 | - | 0.00 | % | |||||||||||||
3 BOTS PTY LTD <WATSON FAMILY A/C> | 5660 | 0.00 | % | 5,660 | - | 0.00 | % | |||||||||||||
MANIC INVESTMENTS PTY LTD <CORICA FAMILY A/C> | 5660 | 0.00 | % | 5,660 | - | 0.00 | % | |||||||||||||
MS TINA MARIA MATANIC | 5621 | 0.00 | % | 5,621 | - | 0.00 | % | |||||||||||||
MR RODNEY FAGG & MRS JULIE FAGG <SUPER FUND A/C> | 5607 | 0.00 | % | 5,607 | - | 0.00 | % | |||||||||||||
MRS CINDY LOUISE HUPPATZ | 5588 | 0.00 | % | 5,588 | - | 0.00 | % | |||||||||||||
MR PAUL TOSIN & MS ELIZABETH FLORENCE KINNON <TK UNIT A/C> | 5584 | 0.00 | % | 5,584 | - | 0.00 | % |
59 |
60 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MRS VIRGINIA DALZOTTO & MR GEORGE DALZOTTO | 4298 | 0.00 | % | 4,298 | - | 0.00 | % | |||||||||||||
MISS KYLIE REBECCA HARRIS & MR MICHAEL HENRY SMITH | 4252 | 0.00 | % | 4,252 | - | 0.00 | % | |||||||||||||
MR BEN JONES | 4231 | 0.00 | % | 4,231 | - | 0.00 | % | |||||||||||||
MR ATTILIO IMPERATORI & MRS CHRISTINE HELEN LOUISE IMPERATORI | 4212 | 0.00 | % | 4,212 | - | 0.00 | % | |||||||||||||
MS ANNIKA DILLENBECK | 4202 | 0.00 | % | 4,202 | - | 0.00 | % | |||||||||||||
BELLERISE PTY LIMITED <SUPERANNUATION FUND A/C> | 4126 | 0.00 | % | 4,126 | - | 0.00 | % | |||||||||||||
JOSAN CONSULTANTS PTY LTD <THE DAVIS FAMILY A/C> | 4088 | 0.00 | % | 4,088 | - | 0.00 | % | |||||||||||||
MRS SEEMA KINGER & MR SANJAY KINGER | 4088 | 0.00 | % | 4,088 | - | 0.00 | % | |||||||||||||
MR MARK THEODORE OHLSSON | 4088 | 0.00 | % | 4,088 | - | 0.00 | % | |||||||||||||
MS DIANNE STEPHANDELLIS | 4088 | 0.00 | % | 4,088 | - | 0.00 | % | |||||||||||||
MS GINA STAMATELOPOULOS <FREE WILL FUND A/C> | 4079 | 0.00 | % | 4,079 | - | 0.00 | % | |||||||||||||
MR RODNEY JAMES MACKAY & MR JOHN ANDREW ALLEN <MACKAY & ALLEN STAFF S/F A/C> | 4071 | 0.00 | % | 4,071 | - | 0.00 | % | |||||||||||||
MRS TRILAS MATESHA LEEMAN | 4060 | 0.00 | % | 4,060 | - | 0.00 | % | |||||||||||||
MR ANDREW DUC NGHIA TRAN | 3991 | 0.00 | % | 3,991 | - | 0.00 | % | |||||||||||||
MR COLIN J STRICKLAND & MRS GAIL STRICKLAND <STRICKLAND SUPER FUND A/C> | 3986 | 0.00 | % | 3,986 | - | 0.00 | % | |||||||||||||
MR WALLY MUHIEDDINE | 3969 | 0.00 | % | 3,969 | - | 0.00 | % | |||||||||||||
MR TIMOTHY RAMSEY & MRS JODIE RAMSEY | 3951 | 0.00 | % | 3,951 | - | 0.00 | % | |||||||||||||
CLIMAX HOLDINGS PTY LIMITED | 3940 | 0.00 | % | 3,940 | - | 0.00 | % | |||||||||||||
MR DAVID WALLACE | 3924 | 0.00 | % | 3,924 | - | 0.00 | % | |||||||||||||
MRS HELEN D ANTHONY | 3890 | 0.00 | % | 3,890 | - | 0.00 | % | |||||||||||||
MR MERVYN VICTOR DUNKIN & MRS JEANETTE CLYDA DUNKIN | 3843 | 0.00 | % | 3,843 | - | 0.00 | % | |||||||||||||
WOO JIE MING | 3679 | 0.00 | % | 3,679 | - | 0.00 | % | |||||||||||||
NYCOR SUPER PTY LTD <NYCOR SUPER FUND A/C> | 3679 | 0.00 | % | 3,679 | - | 0.00 | % | |||||||||||||
MR STEWART PALMER | 3677 | 0.00 | % | 3,677 | - | 0.00 | % | |||||||||||||
MRS RONISE BARR | 3547 | 0.00 | % | 3,547 | - | 0.00 | % | |||||||||||||
MR JOHN BARR & MRS RONICE BARR | 3504 | 0.00 | % | 3,504 | - | 0.00 | % | |||||||||||||
MRS RONISE EDITH BARR & MR JOHN JAMES BARR <BARR SUPER FUND A/C> | 3504 | 0.00 | % | 3,504 | - | 0.00 | % | |||||||||||||
MS ANNA SII | 3493 | 0.00 | % | 3,493 | - | 0.00 | % | |||||||||||||
MR MARK STUART PAGE & MRS ODETTE MARGARET PAGE | 3467 | 0.00 | % | 3,467 | - | 0.00 | % | |||||||||||||
MR MARTIN MACKENZIE & MRS MARY MACKENZIE | 3375 | 0.00 | % | 3,375 | - | 0.00 | % | |||||||||||||
MS LIANE TAYLOR | 3368 | 0.00 | % | 3,368 | - | 0.00 | % | |||||||||||||
MR ANTHONY MALCOLM BADGER | 3306 | 0.00 | % | 3,306 | - | 0.00 | % | |||||||||||||
MR KENNETH JAMES POLS | 3305 | 0.00 | % | 3,305 | - | 0.00 | % | |||||||||||||
MR BERKELEY MCLEISH WYNNE | 3299 | 0.00 | % | 3,299 | - | 0.00 | % | |||||||||||||
MS ROSEMARY ETHEL WYNNE | 3299 | 0.00 | % | 3,299 | - | 0.00 | % | |||||||||||||
MNE-LONGTIME PTY LTD <MNE FAMILY A/C> | 3270 | 0.00 | % | 3,270 | - | 0.00 | % | |||||||||||||
MR KARL UNTERFRAUNER & MRS MICHELE UNTERFRAUNER <UNTERFRAUNER FAMILY A/C> | 3270 | 0.00 | % | 3,270 | - | 0.00 | % | |||||||||||||
MS JENNA FORD <FARAWAY SUPER FUND A/C> | 3219 | 0.00 | % | 3,219 | - | 0.00 | % | |||||||||||||
MR GAVIN JAMES WOODROW | 3219 | 0.00 | % | 3,219 | - | 0.00 | % | |||||||||||||
MISS MELISSA MAREE PARK | 3175 | 0.00 | % | 3,175 | - | 0.00 | % | |||||||||||||
MR JOHN MARY CAUCHI | 3132 | 0.00 | % | 3,132 | - | 0.00 | % |
61 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR DANIEL EVERINGHAM | 3092 | 0.00 | % | 3,092 | - | 0.00 | % | |||||||||||||
MR DARREN ROBERT PUTLAND | 3066 | 0.00 | % | 3,066 | - | 0.00 | % | |||||||||||||
MR MARTIN GRAHAM CHAPMAN & MRS AUDREY CHAPMAN | 3053 | 0.00 | % | 3,053 | - | 0.00 | % | |||||||||||||
MS ESTHER ANNE HAMELINK | 3035 | 0.00 | % | 3,035 | - | 0.00 | % | |||||||||||||
MR FRASER HILL STEVENS & MRS LORNA ROSE STEVENS | 3025 | 0.00 | % | 3,025 | - | 0.00 | % | |||||||||||||
MS SHEILA CUMMINS | 3000 | 0.00 | % | 3,000 | - | 0.00 | % | |||||||||||||
LEE NEWMAN | 3000 | 0.00 | % | 3,000 | - | 0.00 | % | |||||||||||||
MS KRISTY NEWMAN | 3000 | 0.00 | % | 3,000 | - | 0.00 | % | |||||||||||||
MS MEGAN NEWMAN | 3000 | 0.00 | % | 3,000 | - | 0.00 | % | |||||||||||||
MS ELIZABETH ALISON THUAN | 3000 | 0.00 | % | 3,000 | - | 0.00 | % | |||||||||||||
MR RUSSELL C DUNKIN | 2969 | 0.00 | % | 2,969 | - | 0.00 | % | |||||||||||||
MR MICHAEL JAMES MCAULIFFE | 2931 | 0.00 | % | 2,931 | - | 0.00 | % | |||||||||||||
BBG CONSULTING PTY LTD <BBG CONSULTING S/F A/C> | 2924 | 0.00 | % | 2,924 | - | 0.00 | % | |||||||||||||
LIMBRE PTY LTD <GARTON SUPER FUND A/C> | 2876 | 0.00 | % | 2,876 | - | 0.00 | % | |||||||||||||
MR DAVID WARREN & MS ANN JEFFERY <JEFFERY WARREN S/F A/C> | 2875 | 0.00 | % | 2,875 | - | 0.00 | % | |||||||||||||
MR THOMAS ASHCROFT & MRS JULIA PATRICIA ASHCROFT | 2868 | 0.00 | % | 2,868 | - | 0.00 | % | |||||||||||||
MR PETER SCOTT <SCOTT SUPER FUND A/C> | 2860 | 0.00 | % | 2,860 | - | 0.00 | % | |||||||||||||
MR PHILIP ROSS SMITH | 2838 | 0.00 | % | 2,838 | - | 0.00 | % | |||||||||||||
MR NEIL ARTHUR YOUNG & MRS HEATHER JUNE YOUNG | 2819 | 0.00 | % | 2,819 | - | 0.00 | % | |||||||||||||
MR DAVID JOHN PLEDGER | 2781 | 0.00 | % | 2,781 | - | 0.00 | % | |||||||||||||
MR TREVOR DUNSHEA & MRS BEVERLEY DUNSHEA <DUNSHEA SUPER FUND A/C> | 2750 | 0.00 | % | 2,750 | - | 0.00 | % | |||||||||||||
MR BARRY ALAN ELMS | 2700 | 0.00 | % | 2,700 | - | 0.00 | % | |||||||||||||
GOOD NEWS MARKETING PTY LTD | 2656 | 0.00 | % | 2,656 | - | 0.00 | % | |||||||||||||
MR BRETT JOHN WARD | 2540 | 0.00 | % | 2,540 | - | 0.00 | % | |||||||||||||
MR GLEN HAWKINS <THE HAWKS DISCRETIONARY A/C> | 2538 | 0.00 | % | 2,538 | - | 0.00 | % | |||||||||||||
MR DWAYNE DAVID SPARKES | 2525 | 0.00 | % | 2,525 | - | 0.00 | % | |||||||||||||
MR MICHAEL CHRISAFIS | 2523 | 0.00 | % | 2,523 | - | 0.00 | % | |||||||||||||
CASCADE HOLDINGS PTY LTD <THE SYDNEY S/FUND A/C> | 2500 | 0.00 | % | 2,500 | - | 0.00 | % | |||||||||||||
MR WARWICK CLARKE | 2500 | 0.00 | % | 2,500 | - | 0.00 | % | |||||||||||||
MRS LEE ANN CONNOR | 2500 | 0.00 | % | 2,500 | - | 0.00 | % | |||||||||||||
CREDIT SUISSE LTD | 2500 | 0.00 | % | 2,500 | - | 0.00 | % | |||||||||||||
MR BRUCE ROSS HERIOT | 2500 | 0.00 | % | 2,500 | - | 0.00 | % | |||||||||||||
DR. WILLIAM ALEXANDER MACLAURIN | 2500 | 0.00 | % | 2,500 | - | 0.00 | % | |||||||||||||
MR GRANT ROSS MUNDAY | 2500 | 0.00 | % | 2,500 | - | 0.00 | % | |||||||||||||
MR STEVEN VUKOVIC | 2500 | 0.00 | % | 2,500 | - | 0.00 | % | |||||||||||||
MR TONI KILGOUR & MS KARLENE KILGOUR & MS DANIELLE KILGOUR | 2495 | 0.00 | % | 2,495 | - | 0.00 | % | |||||||||||||
MRS SHARON MAREE DELMENICO <DELMENICO SUPER FUND A/C> | 2453 | 0.00 | % | 2,453 | - | 0.00 | % | |||||||||||||
MR RICHARD FRIAR & MRS ALLISON FRIAR | 2453 | 0.00 | % | 2,453 | - | 0.00 | % | |||||||||||||
MS ROBYN LYNETTE HARRIS <ROBYN LYNETTE SUPR FND A/C> | 2453 | 0.00 | % | 2,453 | - | 0.00 | % | |||||||||||||
JASCO QLD PTY LTD | 2453 | 0.00 | % | 2,453 | - | 0.00 | % | |||||||||||||
MR JOHN PUGSLEY & MRS SUSAN PUGSLEY <PUGSLEY SUPER FUND A/C> | 2453 | 0.00 | % | 2,453 | - | 0.00 | % |
62 |
63 |
64 |
65 |
66 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MS JACQUELINE RUTH WILLIAMS | 1027 | 0.00 | % | 1,027 | - | 0.00 | % | |||||||||||||
MR SIMON JAMES CLOVER | 1000 | 0.00 | % | 1,000 | - | 0.00 | % | |||||||||||||
TONY HARGREAVES & ASSOCIATES PTY LTD | 1000 | 0.00 | % | 1,000 | - | 0.00 | % | |||||||||||||
MR COLIN JOHN DAMIANI | 989 | 0.00 | % | 989 | - | 0.00 | % | |||||||||||||
MS DIANE RUTH DAMIANI | 989 | 0.00 | % | 989 | - | 0.00 | % | |||||||||||||
RACHAEL ANNE JAY | 985 | 0.00 | % | 985 | - | 0.00 | % | |||||||||||||
MR JIM POOLEY <BALLIEBROOK HOLDINGS P/L ACC> | 985 | 0.00 | % | 985 | - | 0.00 | % | |||||||||||||
COAB PTY LTD | 981 | 0.00 | % | 981 | - | 0.00 | % | |||||||||||||
MR ANDREW SHAW & MS JOSEPHINE BURROWS | 981 | 0.00 | % | 981 | - | 0.00 | % | |||||||||||||
MR JOHN NEGHERBON & MRS CARMEL NEGHERBON | 957 | 0.00 | % | 957 | - | 0.00 | % | |||||||||||||
MR BRIAN JEFFREY PRICE & MRS CHRISTINE LEE PRICE | 955 | 0.00 | % | 955 | - | 0.00 | % | |||||||||||||
MR GRANT RUSSELL WOODROW | 953 | 0.00 | % | 953 | - | 0.00 | % | |||||||||||||
MS DOROTHY JEAN ELLIS <THE D ELLIS SUPER FUND A/C> | 938 | 0.00 | % | 938 | - | 0.00 | % | |||||||||||||
MR DANNY JOHN MARSON | 925 | 0.00 | % | 925 | - | 0.00 | % | |||||||||||||
MR CHRISTOPHER MARY RUYS <THE RUYS FAMILY A/C> | 920 | 0.00 | % | 920 | - | 0.00 | % | |||||||||||||
MRS JULIE ROBINSON | 908 | 0.00 | % | 908 | - | 0.00 | % | |||||||||||||
MS SUSNA LAI CHU LAU | 907 | 0.00 | % | 907 | - | 0.00 | % | |||||||||||||
MR SHANE ANDREWS | 904 | 0.00 | % | 904 | - | 0.00 | % | |||||||||||||
NEW GRANGE ESTATE PTY LTD | 892 | 0.00 | % | 892 | - | 0.00 | % | |||||||||||||
MR PETER MARSH & MRS DAWN MAY MARSH <BILSTAR SUPER FUND A/C> | 890 | 0.00 | % | 890 | - | 0.00 | % | |||||||||||||
RF WILMINK & FA WILMINK & JO WILMINK <WILMINK SUPER FUND A/C> | 883 | 0.00 | % | 883 | - | 0.00 | % | |||||||||||||
MR FRANK LESLIE DAVIES | 879 | 0.00 | % | 879 | - | 0.00 | % | |||||||||||||
MR DARREN EDWARDS | 875 | 0.00 | % | 875 | - | 0.00 | % | |||||||||||||
MR RAJINDER SINGH | 875 | 0.00 | % | 875 | - | 0.00 | % | |||||||||||||
MR TOM HILLARDT | 874 | 0.00 | % | 874 | - | 0.00 | % | |||||||||||||
MR GARY HOLMES & MRS JULIE HOLMES | 855 | 0.00 | % | 855 | - | 0.00 | % | |||||||||||||
MR MARCUS FINCH & MRS ROBYN ANN FINCH <LAPARINTA SUPER FUND A/C> | 853 | 0.00 | % | 853 | - | 0.00 | % | |||||||||||||
MS NICOLE MERDY | 853 | 0.00 | % | 853 | - | 0.00 | % | |||||||||||||
MS NICOLE M MERDY | 853 | 0.00 | % | 853 | - | 0.00 | % | |||||||||||||
MR ROBERT MALCOLM WILKIE | 846 | 0.00 | % | 846 | - | 0.00 | % | |||||||||||||
MS GAYLENE ANN DIAMOND | 836 | 0.00 | % | 836 | - | 0.00 | % | |||||||||||||
MRS MICHELLE MARIA NUGARA <OLIVIA & SHANIA NUGARA A/C> | 818 | 0.00 | % | 818 | - | 0.00 | % | |||||||||||||
MS MERREN BARBARA BREMNER | 817 | 0.00 | % | 817 | - | 0.00 | % | |||||||||||||
MRS ANNETTE BUDARICK | 816 | 0.00 | % | 816 | - | 0.00 | % | |||||||||||||
MR ANDREW MURRAY | 816 | 0.00 | % | 816 | - | 0.00 | % | |||||||||||||
MR GAVIN SEETO & MRS CECILIA SEETO <SEETO SUPER FUND A/C> | 816 | 0.00 | % | 816 | - | 0.00 | % | |||||||||||||
MR MALCOLM BUTLER & MRS LIDIANA BUTLER | 813 | 0.00 | % | 813 | - | 0.00 | % | |||||||||||||
J & A HEATH PTY LTD <WOODVILLE SUPER FUND A/C> | 800 | 0.00 | % | 800 | - | 0.00 | % | |||||||||||||
MR GEOFFREY CHARLES ROSEVEAR | 798 | 0.00 | % | 798 | - | 0.00 | % | |||||||||||||
ASTRABUILD PTY LIMITED <DIRECTORS SUPER FUND ACCOUNT> | 794 | 0.00 | % | 794 | - | 0.00 | % | |||||||||||||
MASCOTGLEN PTY LTD | 794 | 0.00 | % | 794 | - | 0.00 | % |
67 |
68 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR DAVID WATSON & MRS RUTH WATSON | 684 | 0.00 | % | 684 | - | 0.00 | % | |||||||||||||
DURAND HOLDINGS PTY LTD | 675 | 0.00 | % | 675 | - | 0.00 | % | |||||||||||||
MRS JENNIFER ROBYN RODERICK | 668 | 0.00 | % | 668 | - | 0.00 | % | |||||||||||||
MRS BETTY FREEMAN | 663 | 0.00 | % | 663 | - | 0.00 | % | |||||||||||||
MRS JODIE PENFOLD | 661 | 0.00 | % | 661 | - | 0.00 | % | |||||||||||||
DR CHRISTOPHER JOHN ORR <ORR SUPER FUND ACCOUNT> | 650 | 0.00 | % | 650 | - | 0.00 | % | |||||||||||||
MR CHRISTOPHER JOHN BUNNEY | 635 | 0.00 | % | 635 | - | 0.00 | % | |||||||||||||
MISS KAY ELIZABETH ARMOUR | 625 | 0.00 | % | 625 | - | 0.00 | % | |||||||||||||
MR DANIEL ELLIDGE | 625 | 0.00 | % | 625 | - | 0.00 | % | |||||||||||||
MR ANDREW FUDGE & MRS KAREN FUDGE <FUDGE FAMILY S/F A/C> | 625 | 0.00 | % | 625 | - | 0.00 | % | |||||||||||||
MR BYRON THANOPOULOS | 625 | 0.00 | % | 625 | - | 0.00 | % | |||||||||||||
MR BRIAN JOHN HUDSON | 619 | 0.00 | % | 619 | - | 0.00 | % | |||||||||||||
MRS SHARON DELMENICO & MR WESLEY DELMENICO <DELMENICO FAMILY A/C> | 614 | 0.00 | % | 614 | - | 0.00 | % | |||||||||||||
MRS LOREEN LAL | 605 | 0.00 | % | 605 | - | 0.00 | % | |||||||||||||
MR CHRISTOPHER BUNNEY | 601 | 0.00 | % | 601 | - | 0.00 | % | |||||||||||||
MR PAUL SOLOMON & MRS LEE SOLOMON | 601 | 0.00 | % | 601 | - | 0.00 | % | |||||||||||||
MS SHERIDAN LEE HONEY & MR ROBERT GRANT FRASER <LAPIN ET TIGRE SUPERANN A/C> | 600 | 0.00 | % | 600 | - | 0.00 | % | |||||||||||||
LH SCAMATON PROPERTY CORPORATION PTY LTD <THE RAINBOW FAMILY A/C> | 600 | 0.00 | % | 600 | - | 0.00 | % | |||||||||||||
PAGESO HOLDINGS PTY LTD <SOUTHERN SHARE TRADING A/C> | 600 | 0.00 | % | 600 | - | 0.00 | % | |||||||||||||
MR ROBERT JOHN SALVAIR | 600 | 0.00 | % | 600 | - | 0.00 | % | |||||||||||||
MR ROSS WILLIAM WARNER | 600 | 0.00 | % | 600 | - | 0.00 | % | |||||||||||||
MS KRISTEN YOUNG | 600 | 0.00 | % | 600 | - | 0.00 | % | |||||||||||||
MR PAUL MAXWELL FOX | 598 | 0.00 | % | 598 | - | 0.00 | % | |||||||||||||
MR RONALD D KING & MRS MADGE L KING <KING FAMILY SUPER FUND A/C> | 590 | 0.00 | % | 590 | - | 0.00 | % | |||||||||||||
MR GRAHAM EUGENE CROMB | 588 | 0.00 | % | 588 | - | 0.00 | % | |||||||||||||
MR MATTHEW TYSON KITCHENER | 572 | 0.00 | % | 572 | - | 0.00 | % | |||||||||||||
MR JOSEPH BARBA | 557 | 0.00 | % | 557 | - | 0.00 | % | |||||||||||||
MR WAYNE CONNELL & MRS MICHELLE CONNELL | 555 | 0.00 | % | 555 | - | 0.00 | % | |||||||||||||
MR DON FAIRBROTHER <FAIRBROTHER FAMILY A/C> | 555 | 0.00 | % | 555 | - | 0.00 | % | |||||||||||||
MS LOREEN LAL | 550 | 0.00 | % | 550 | - | 0.00 | % | |||||||||||||
MR MARK ROBERT AUSTIN | 548 | 0.00 | % | 548 | - | 0.00 | % | |||||||||||||
MR MATTHEW DOUGLAS MIDDLEMISS | 544 | 0.00 | % | 544 | - | 0.00 | % | |||||||||||||
MISS MARIA SZABO | 540 | 0.00 | % | 540 | - | 0.00 | % | |||||||||||||
MR ROGER S FOXTON & MRS JENNIFER S FOXTON | 532 | 0.00 | % | 532 | - | 0.00 | % | |||||||||||||
MISS DANIELLE THERESE MCINTYRE | 529 | 0.00 | % | 529 | - | 0.00 | % | |||||||||||||
MS BEVERLEY GORDON | 528 | 0.00 | % | 528 | - | 0.00 | % | |||||||||||||
MARIE ARIADHNE LABOUR | 512 | 0.00 | % | 512 | - | 0.00 | % | |||||||||||||
MRS EDITH BLEIER | 502 | 0.00 | % | 502 | - | 0.00 | % | |||||||||||||
MR GREGORY PAUL BUSS | 500 | 0.00 | % | 500 | - | 0.00 | % | |||||||||||||
MR MILAN DEBELAK | 500 | 0.00 | % | 500 | - | 0.00 | % | |||||||||||||
MR PAUL WILLIAM HUTCHINSON & MRS DEBBIE LEA HUTCHINSON | 500 | 0.00 | % | 500 | - | 0.00 | % |
69 |
70 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR CAMERON WRIGHT <WRIGHT S/F A/C> | 315 | 0.00 | % | 315 | - | 0.00 | % | |||||||||||||
MR MALCOLM JOHN HILL | 313 | 0.00 | % | 313 | - | 0.00 | % | |||||||||||||
MR GEOFFREY WALTON & MR LEE WALTON | 313 | 0.00 | % | 313 | - | 0.00 | % | |||||||||||||
MR GIULIO MINUZZO | 304 | 0.00 | % | 304 | - | 0.00 | % | |||||||||||||
MR ROBERT WETTENHALL MCFARLAND & MR ERROLLY GLEN MCFARLAND | 302 | 0.00 | % | 302 | - | 0.00 | % | |||||||||||||
MR FRANK A WILMINK <WILMINK S/F A/C> | 299 | 0.00 | % | 299 | - | 0.00 | % | |||||||||||||
MISS LEAH COCHRANE | 288 | 0.00 | % | 288 | - | 0.00 | % | |||||||||||||
MR VINCE DEL POPOLO & MS KAREN ANNE DEL POPOLO <V & K DEL POPOLO SUPER A/C> | 279 | 0.00 | % | 279 | - | 0.00 | % | |||||||||||||
MR ANTHONY BADGER & MS LINDA KACHEL <SUPER FUND A/C> | 278 | 0.00 | % | 278 | - | 0.00 | % | |||||||||||||
MR MALCOLM HILL | 278 | 0.00 | % | 278 | - | 0.00 | % | |||||||||||||
MR NOEL JOHN LILL | 278 | 0.00 | % | 278 | - | 0.00 | % | |||||||||||||
MR BARRY JAMES SILLETT & MRS BEVERLEY ANN SILLETT | 270 | 0.00 | % | 270 | - | 0.00 | % | |||||||||||||
MRS ALLISON MARY FRIAR & MR RICHARD KEITH FRIAR | 264 | 0.00 | % | 264 | - | 0.00 | % | |||||||||||||
MR RONALD DAVID WILLIAMS & MRS CAROL ANN WILLIAMS | 261 | 0.00 | % | 261 | - | 0.00 | % | |||||||||||||
MRS DACE JOHNSON | 259 | 0.00 | % | 259 | - | 0.00 | % | |||||||||||||
MRS LISA MARIE SEALE | 254 | 0.00 | % | 254 | - | 0.00 | % | |||||||||||||
MR GEORGE KARANTZIAS | 250 | 0.00 | % | 250 | - | 0.00 | % | |||||||||||||
MR DAVID TIN-SING LAU | 250 | 0.00 | % | 250 | - | 0.00 | % | |||||||||||||
MS MARIE-THERESA O'DWYER | 250 | 0.00 | % | 250 | - | 0.00 | % | |||||||||||||
MR JARROD SHANE SMITH | 250 | 0.00 | % | 250 | - | 0.00 | % | |||||||||||||
MR ANDREW ROBERT NGUYEN THUAN | 250 | 0.00 | % | 250 | - | 0.00 | % | |||||||||||||
MR TRAVIS DALE HUDSON | 246 | 0.00 | % | 246 | - | 0.00 | % | |||||||||||||
NEWCED PTY LTD | 244 | 0.00 | % | 244 | - | 0.00 | % | |||||||||||||
MR PETER GOWAN <JUPEK PTY LTD A/C> | 235 | 0.00 | % | 235 | - | 0.00 | % | |||||||||||||
MRS GAYLE YVONNE TONSCHECK & MR LESTER JOHN TONSCHECK <L&G TONSCHECK SUPER FUND A/C> | 233 | 0.00 | % | 233 | - | 0.00 | % | |||||||||||||
MRS LAUREN KATHLENE GORDON | 225 | 0.00 | % | 225 | - | 0.00 | % | |||||||||||||
MR ANTONY JAMES HING | 225 | 0.00 | % | 225 | - | 0.00 | % | |||||||||||||
MISS KIRSTIN MILLER | 225 | 0.00 | % | 225 | - | 0.00 | % | |||||||||||||
MR GARRY DUNSTAN <DUNSTAN FAMILY S/FUND A/C> | 224 | 0.00 | % | 224 | - | 0.00 | % | |||||||||||||
MR DAVID J PRICE | 224 | 0.00 | % | 224 | - | 0.00 | % | |||||||||||||
MR KIRK WAYNE PURCHASE | 218 | 0.00 | % | 218 | - | 0.00 | % | |||||||||||||
MR WILLIAM NICHOLAS FRASER & MRS YOLANTA MARTA FRASER | 214 | 0.00 | % | 214 | - | 0.00 | % | |||||||||||||
MR PHILLIP HYAMS | 214 | 0.00 | % | 214 | - | 0.00 | % | |||||||||||||
MRS PATRICIA JOAN HENDERSON | 212 | 0.00 | % | 212 | - | 0.00 | % | |||||||||||||
MRS JODIE PENFOLD <LAURA PENFOLD ACCOUNT> | 209 | 0.00 | % | 209 | - | 0.00 | % | |||||||||||||
MR NEIL ANDREW CATO | 208 | 0.00 | % | 208 | - | 0.00 | % | |||||||||||||
MR GARRY CROSS | 208 | 0.00 | % | 208 | - | 0.00 | % | |||||||||||||
MR HOWARD JOHN GATELEY | 205 | 0.00 | % | 205 | - | 0.00 | % | |||||||||||||
MR ROSS HOWARD <R HOWARD RETIREMENT FUND A/C> | 204 | 0.00 | % | 204 | - | 0.00 | % | |||||||||||||
MR DAVID MACK <MACK FAMILY A/C> | 204 | 0.00 | % | 204 | - | 0.00 | % | |||||||||||||
MRS TONI MAE CAPUTO | 202 | 0.00 | % | 202 | - | 0.00 | % |
71 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR STEPHEN JOHN COCKS | 200 | 0.00 | % | 200 | - | 0.00 | % | |||||||||||||
MR BRUCE LUDWIGS <LUDWIGS RETIREMENT FUND A/C> | 196 | 0.00 | % | 196 | - | 0.00 | % | |||||||||||||
MISS LEISA JAYNE PROVOST | 168 | 0.00 | % | 168 | - | 0.00 | % | |||||||||||||
MR STEPHEN GRABOWSKI | 164 | 0.00 | % | 164 | - | 0.00 | % | |||||||||||||
MR MICHAEL DENNIS BRAY | 163 | 0.00 | % | 163 | - | 0.00 | % | |||||||||||||
MR MICHAEL JOHN DUFFY | 157 | 0.00 | % | 157 | - | 0.00 | % | |||||||||||||
MR NATHAN KING | 150 | 0.00 | % | 150 | - | 0.00 | % | |||||||||||||
MR JOSEPH DAVID QUALTROUGH <THE JOSMAR A/C> | 150 | 0.00 | % | 150 | - | 0.00 | % | |||||||||||||
MR MICHAEL STELLER | 150 | 0.00 | % | 150 | - | 0.00 | % | |||||||||||||
MR SIMON DUPRE | 149 | 0.00 | % | 149 | - | 0.00 | % | |||||||||||||
MS TANIA MAREE HANN | 149 | 0.00 | % | 149 | - | 0.00 | % | |||||||||||||
MS SUSANA LAU | 142 | 0.00 | % | 142 | - | 0.00 | % | |||||||||||||
MR GARTH THOMAS SILVA | 131 | 0.00 | % | 131 | - | 0.00 | % | |||||||||||||
MR ANDREW CUNNINGHAM | 130 | 0.00 | % | 130 | - | 0.00 | % | |||||||||||||
MR GRAHAM AUSTIN ROWE & MRS SO SHAN ROWE <GRAHAM ROWE SUPER FUND A/C> | 129 | 0.00 | % | 129 | - | 0.00 | % | |||||||||||||
MRS ANNE RUYS <NAOMI NATHAN SIMON RUYS A/C> | 126 | 0.00 | % | 126 | - | 0.00 | % | |||||||||||||
MRS CORRIE MAY DE AZEVEDO | 125 | 0.00 | % | 125 | - | 0.00 | % | |||||||||||||
MR ROSS PHILIP BAUER & MRS CAROLYN ANNE BAUER | 125 | 0.00 | % | 125 | - | 0.00 | % | |||||||||||||
MRS JOAN MARION BRADBURY | 125 | 0.00 | % | 125 | - | 0.00 | % | |||||||||||||
MR STEPHEN JOHN DUFFY & MRS ALEXANDRA MARY DUFFY | 125 | 0.00 | % | 125 | - | 0.00 | % | |||||||||||||
MRS COLLEEN MARY MILLER | 125 | 0.00 | % | 125 | - | 0.00 | % | |||||||||||||
MR PERRY JOHN REGOLINI & MRS GABRIELLE SIMONE REGOLINI | 125 | 0.00 | % | 125 | - | 0.00 | % | |||||||||||||
W J RICHARDSON PTY LTD <RICHARDSON SUPER FUND A/C> | 125 | 0.00 | % | 125 | - | 0.00 | % | |||||||||||||
MS LEI XU | 125 | 0.00 | % | 125 | - | 0.00 | % | |||||||||||||
A A ANTHONY PTY LTD <A A ANTHONY FAMILY A/C> | 123 | 0.00 | % | 123 | - | 0.00 | % | |||||||||||||
MR DIMITRIOS KATSOS | 123 | 0.00 | % | 123 | - | 0.00 | % | |||||||||||||
MS KARLENE KILGOUR | 123 | 0.00 | % | 123 | - | 0.00 | % | |||||||||||||
KOSTEN PTY LTD | 122 | 0.00 | % | 122 | - | 0.00 | % | |||||||||||||
MRS LYNDA ELIZABETH SUGARS | 122 | 0.00 | % | 122 | - | 0.00 | % | |||||||||||||
ZISSOPOULOS TRANSPORT PTY LTD | 122 | 0.00 | % | 122 | - | 0.00 | % | |||||||||||||
MR SEAN MATTHEW MCNAMARA | 120 | 0.00 | % | 120 | - | 0.00 | % | |||||||||||||
MR PETER DURDIN | 117 | 0.00 | % | 117 | - | 0.00 | % | |||||||||||||
MR JOHN JAMES CAMPBELL & MRS WENDY BEATRIX CAMPBELL | 116 | 0.00 | % | 116 | - | 0.00 | % | |||||||||||||
MR PETER BARNES | 115 | 0.00 | % | 115 | - | 0.00 | % | |||||||||||||
MR DOMENIC DE LUCA & MRS ANTOINETTE DE LUCA <JULIAN DE LUCA A/C> | 112 | 0.00 | % | 112 | - | 0.00 | % | |||||||||||||
MR DOMENIC DE LUCA & MRS ANNE DE LUCA <THOMAS DE LUCA A/C> | 112 | 0.00 | % | 112 | - | 0.00 | % | |||||||||||||
MR CAMERON TERRY | 111 | 0.00 | % | 111 | - | 0.00 | % | |||||||||||||
MR WAYNE RICHARD BOSDEN & MRS FIONA JOY BOSDEN | 110 | 0.00 | % | 110 | - | 0.00 | % | |||||||||||||
MR RODNEY FAGG & MRS JULIE FAGG <SUPERANNUATION FUND A/C> | 110 | 0.00 | % | 110 | - | 0.00 | % | |||||||||||||
MR DEAN GILCHRIST | 110 | 0.00 | % | 110 | - | 0.00 | % | |||||||||||||
MR COLIN MANN & MRS SUE MANN | 110 | 0.00 | % | 110 | - | 0.00 | % |
72 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR MARK BALLINGER <BALLINGER RETIREMENT FUND AC> | 107 | 0.00 | % | 107 | - | 0.00 | % | |||||||||||||
DAVKEN PTY LTD | 107 | 0.00 | % | 107 | - | 0.00 | % | |||||||||||||
MR MARK WILLIAM GOODWIN & MR LINDSAY JOHN GOODWIN <M GOODWIN SUPER FUND A/C> | 107 | 0.00 | % | 107 | - | 0.00 | % | |||||||||||||
MR ANDRE PAUL | 107 | 0.00 | % | 107 | - | 0.00 | % | |||||||||||||
MR LANCE PINK <BUGS BUNNY SUPER FUND A/C> | 107 | 0.00 | % | 107 | - | 0.00 | % | |||||||||||||
TANDARA PASTORAL CO PTY LTD | 105 | 0.00 | % | 105 | - | 0.00 | % | |||||||||||||
MR STEPHEN O'LOUGHLIN | 104 | 0.00 | % | 104 | - | 0.00 | % | |||||||||||||
MRS CHRISTINE MARY SMITH | 101 | 0.00 | % | 101 | - | 0.00 | % | |||||||||||||
TRANS PACIFIC HEALTH CARE LTD | 101 | 0.00 | % | 101 | - | 0.00 | % | |||||||||||||
MS IRMGARD JAUK | 100 | 0.00 | % | 100 | - | 0.00 | % | |||||||||||||
MS MARION JEAN FAINT | 98 | 0.00 | % | 98 | - | 0.00 | % | |||||||||||||
PILECOTE PTY LTD | 97 | 0.00 | % | 97 | - | 0.00 | % | |||||||||||||
MR COLIN JOHN STRICKLAND & MRS GAIL NARELLE STRICKLAND <THE C & G STRICKLAND S/F A/C> | 97 | 0.00 | % | 97 | - | 0.00 | % | |||||||||||||
MR ROBIN ROSS & MRS MARY ROSS | 96 | 0.00 | % | 96 | - | 0.00 | % | |||||||||||||
MRS ANNEKE WOOD | 96 | 0.00 | % | 96 | - | 0.00 | % | |||||||||||||
MR NICHOLAS PAUL CASEY & MRS MARGARET THERESE CASEY | 93 | 0.00 | % | 93 | - | 0.00 | % | |||||||||||||
MR STEPHEN JOHN MOFFATT | 93 | 0.00 | % | 93 | - | 0.00 | % | |||||||||||||
NETWEALTH INVESTMENTS LIMITED <WRAP SERVICES A/C> C/- CUSTODY DEPARTMENT | 92 | 0.00 | % | 92 | - | 0.00 | % | |||||||||||||
MR DOUGLAS SMITH CUTHILL | 88 | 0.00 | % | 88 | - | 0.00 | % | |||||||||||||
MR JOHN SAULO & MRS RUTH VIRGINIA SAULO | 88 | 0.00 | % | 88 | - | 0.00 | % | |||||||||||||
MR LIONEL CARL DEWSNAP | 86 | 0.00 | % | 86 | - | 0.00 | % | |||||||||||||
MS JENNA BARBARA FORD & MS WILHELMINA FORD <FARAWAY SUPER FUND A/C> | 86 | 0.00 | % | 86 | - | 0.00 | % | |||||||||||||
MR DAVID ARTHUR HOPE | 86 | 0.00 | % | 86 | - | 0.00 | % | |||||||||||||
KURRAJONG ENTERPRISES PTY LTD | 86 | 0.00 | % | 86 | - | 0.00 | % | |||||||||||||
NITASH PTY LTD <JOHNSTON FAMILY A/C> | 86 | 0.00 | % | 86 | - | 0.00 | % | |||||||||||||
MS DAWN UEBERGANG & MR LEE UEBERGANG | 86 | 0.00 | % | 86 | - | 0.00 | % | |||||||||||||
MRS CHRISTINA DAVIDSON & MR RUSSELL DAVIDSON | 85 | 0.00 | % | 85 | - | 0.00 | % | |||||||||||||
ANTONY ANDREW ANTHONY & CONSTANTINA ANTHONY & ANDREW ANTHONY & STAMATIA T ANTHONY <AA & A ANTHONY S/F A/C> | 83 | 0.00 | % | 83 | - | 0.00 | % | |||||||||||||
MS HELEN ANTHONY | 83 | 0.00 | % | 83 | - | 0.00 | % | |||||||||||||
MR BRUCE REGINALD LUDEWIGS | 81 | 0.00 | % | 81 | - | 0.00 | % | |||||||||||||
MR DAVID JOHN SMITHARD | 78 | 0.00 | % | 78 | - | 0.00 | % | |||||||||||||
MR VINCE BARTOLILLO | 75 | 0.00 | % | 75 | - | 0.00 | % | |||||||||||||
MR GEORGE VASILIOS COMINO | 75 | 0.00 | % | 75 | - | 0.00 | % | |||||||||||||
MRS MARGARET ROSE MCQUILLAN | 75 | 0.00 | % | 75 | - | 0.00 | % | |||||||||||||
MR PETER ROBERT SENG & MRS BRONWYN MARY SENG | 75 | 0.00 | % | 75 | - | 0.00 | % | |||||||||||||
MS JOANNE CONSTANCE WIENERT | 75 | 0.00 | % | 75 | - | 0.00 | % | |||||||||||||
MR SIMON DUPRE | 74 | 0.00 | % | 74 | - | 0.00 | % | |||||||||||||
MR NAUM VITANOVSKI | 74 | 0.00 | % | 74 | - | 0.00 | % | |||||||||||||
MOONGLADE PTY LTD <GLEESON FAMILY S/F A/C> | 73 | 0.00 | % | 73 | - | 0.00 | % | |||||||||||||
MR THOMAS ALEXANDER MCLEAN | 72 | 0.00 | % | 72 | - | 0.00 | % | |||||||||||||
REINHILD ERNA MCLEAN | 72 | 0.00 | % | 72 | - | 0.00 | % |
73 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR BRENDON JAMES O'LOUGHLIN & MRS CHRISTINE LOUISE O'LOUGHLIN | 72 | 0.00 | % | 72 | - | 0.00 | % | |||||||||||||
MR ROBIN ROSS & MRS NICOLE ROSS | 66 | 0.00 | % | 66 | - | 0.00 | % | |||||||||||||
MR STEPHEN ROSS | 66 | 0.00 | % | 66 | - | 0.00 | % | |||||||||||||
MS KYLIE HARRISON | 63 | 0.00 | % | 63 | - | 0.00 | % | |||||||||||||
MR NORMAN AVERY | 61 | 0.00 | % | 61 | - | 0.00 | % | |||||||||||||
MR RUSSELL CRAIG DUNKIN | 61 | 0.00 | % | 61 | - | 0.00 | % | |||||||||||||
MR VALLABHADAS PATEL | 61 | 0.00 | % | 61 | - | 0.00 | % | |||||||||||||
MR NARANDRAKUMAR NARSAI | 59 | 0.00 | % | 59 | - | 0.00 | % | |||||||||||||
MS TAIER BAGE | 55 | 0.00 | % | 55 | - | 0.00 | % | |||||||||||||
MR DESMOND RONALD HALL & MRS KAY PATRICIA HALL | 55 | 0.00 | % | 55 | - | 0.00 | % | |||||||||||||
MR MATHEW KROPMAN & MRS ANNE KROPMAN | 55 | 0.00 | % | 55 | - | 0.00 | % | |||||||||||||
MR HAROLD ROTH MARTIN & MRS KRISTENE BETTY MARTIN <R & K MARTIN SUPER FUND A/C> | 55 | 0.00 | % | 55 | - | 0.00 | % | |||||||||||||
MS LEANNE WIGRAFT | 55 | 0.00 | % | 55 | - | 0.00 | % | |||||||||||||
MR JAMES WARREN ALCORN | 54 | 0.00 | % | 54 | - | 0.00 | % | |||||||||||||
MR TODD FAIRBURN | 54 | 0.00 | % | 54 | - | 0.00 | % | |||||||||||||
HEATHER HANCOCK | 54 | 0.00 | % | 54 | - | 0.00 | % | |||||||||||||
MR BRUCE JONES & MRS LYNETTE JONES | 54 | 0.00 | % | 54 | - | 0.00 | % | |||||||||||||
MR JOHN KELLY & MRS DOMINIQUE KELLY <KELLY KELLY & ASSOC S/F A/C> | 54 | 0.00 | % | 54 | - | 0.00 | % | |||||||||||||
MR JOHN ROGER WILSON | 54 | 0.00 | % | 54 | - | 0.00 | % | |||||||||||||
MR GEOFFREY L MCKENZIE & MRS SUSAN MAREE MCKENZIE <MCKEWBURN SUPER FUND A/C> | 52 | 0.00 | % | 52 | - | 0.00 | % | |||||||||||||
MR FRANCIS WILLIAM DAVIS | 49 | 0.00 | % | 49 | - | 0.00 | % | |||||||||||||
MR LLOYD MCDONALD | 49 | 0.00 | % | 49 | - | 0.00 | % | |||||||||||||
MR SHANNON HANDLEY | 44 | 0.00 | % | 44 | - | 0.00 | % | |||||||||||||
MS KATHLEEN SALOMONS | 44 | 0.00 | % | 44 | - | 0.00 | % | |||||||||||||
MR STEVEN WAYNE SMITH & MRS LEANNE KAY SMITH <STEVEN W SMITH FAMILY A/C> | 44 | 0.00 | % | 44 | - | 0.00 | % | |||||||||||||
MR CLIVE BALL | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
BALLIEBROOK HOLDINGS PTY LTD | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR GREGORY JOHN BEAVER & MRS SANDRA JEAN BEAVER <THE BEAVER SUPER FUND A/C> | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
GAY BURGE | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MS YVETTE CARROLL | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR BRETT JOHN CONROY & MS SUZANNA KASTELIC | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR ROBERT COSTIGAN & MRS ROSALIE COSTIGAN | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR BARRY CUTHBERT | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR IAN DOYLE | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR JOHN ELLIS | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MS LOUISE JANE FAULKNER | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR DESMOND RONALD HALL | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR NOEL HARDINGHAM & MRS SUE HARDINGHAM | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MS DESLEY ANN HAWKINS | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR MURRAY HIGHT & MRS FERN HIGHT | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR MALCOLM HILL & MRS KHRISTINE HILL | 43 | 0.00 | % | 43 | - | 0.00 | % |
74 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR BRIAN HUDSON | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR LEE LEE INGRAM | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
JASCO QLD PTY LTD <JAALMEG DISCRETIONARY A/C> | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
RACHAEL JAY | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
LESLEY A JURY & KEVIN C LUSCOMBE <THE BOWLED OVER S/F A/C> | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MS DANIELLE KILGOUR & MS TONI KILGOUR & MS KARLENE KILGOUR | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MRS JANINE LAKEY | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR WAYNE WILLIAM LEWIS | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MS JODIE LEWIS | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR JOHN H LLOYD & MRS SUSAN A LLOYD | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR ROBERT KEITH LYONS | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MARCARUN PTY LTD <D R SCHROETER SUPER FUND A/C> | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MATSTAR PTY LTD <WHITE ENTERPRISES S/F A/C> | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MS NGAIRE MCCALLUM | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR WALTER VON OETTINGEN & MRS BEVERLEY VON OETTINGEN | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
P & S O'CONNOR PTY LTD <O'CONNOR SUPER FUND A/C> | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR ROBERT PAIGE | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MS MARY-ANNE PHILLIPS | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MS BERNADETTE PICKERING & MS CAROL JOHNSON | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR JOHN WILLIAM REINKE | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR MICHAEL ANTHONY ROWLINGSON& MRS MARGARET HELEN ROWLINGSON | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR KEN SAUL | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR CLIVE SEALY | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR PETER RICHARD SMITH | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR CHARLES STARKEY & MRS ANNE STARKEY | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR ALLAN DAVID SUTHERLAND & MRS DULCIE MAE SUTHERLAND | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR GRANT ALAN TURNER & MRS ANDREA KIRSTAN TURNER <THE TURNER SUPER FUND A/C> | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR THEMISTOCLES VANIERIS & MR DICK THEO QUALLY | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MRS LEISA WARD & MR NIGEL WARD | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR MICHAEL WHITROW & MRS SUSANNE WHITROW | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR MELVYN WHITWORTH | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR PETER WOMERSLEY & MRS SIMONE WOMERSLEY <P&S WOMERSLEY SUPER FUND A/C> | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR STEVE ZISSOPOULOS | 43 | 0.00 | % | 43 | - | 0.00 | % | |||||||||||||
MR RON ANTHONY | 42 | 0.00 | % | 42 | - | 0.00 | % | |||||||||||||
MR KEITH DYKE & MRS SERENA DYKE | 42 | 0.00 | % | 42 | - | 0.00 | % | |||||||||||||
MR BRUCE REGINALD LUDEWIGS & MRS BELINDA ANN LUDEWIGS <LUDEWIGS RETIREMENT FUND A/C> | 42 | 0.00 | % | 42 | - | 0.00 | % | |||||||||||||
MR DAVID PRICE | 42 | 0.00 | % | 42 | - | 0.00 | % | |||||||||||||
MR JOHN E SYMONS | 42 | 0.00 | % | 42 | - | 0.00 | % | |||||||||||||
MR. GRAHAME WALTER JAMES WEST & MRS SUSAN LOLA WEST <WESTIES WEETWEET S/F A/C> | 42 | 0.00 | % | 42 | - | 0.00 | % | |||||||||||||
MR JOHN ROSSY KNOX & MRS DOROTHY MAY KNOX | 41 | 0.00 | % | 41 | - | 0.00 | % | |||||||||||||
MS SUSANA LAI CHU LAU | 41 | 0.00 | % | 41 | - | 0.00 | % |
75 |
Name of Beneficial Owner | No. of Shares Owned Prior to Offering | Percent of Shares Owned Prior to Offering | No. of Shares Being Offered | No. of Shares Owned After Offering | Percent of Shares Owned After Offering | |||||||||||||||
MR GARETH DAVID CHALKLEN & MRS ROSEMARY DAWN CHALKLEN | 40 | 0.00 | % | 40 | - | 0.00 | % | |||||||||||||
MS LORRAINE ELLIOTT | 40 | 0.00 | % | 40 | - | 0.00 | % | |||||||||||||
MR STUART MARK SMITH & MRS CAROL MARGARET SMITH <THE CORVETTE SUPER P/F A/C> | 39 | 0.00 | % | 39 | - | 0.00 | % | |||||||||||||
MS JOSEPHINE HEATHER HOWIE | 38 | 0.00 | % | 38 | - | 0.00 | % | |||||||||||||
MS CHERYL K MCEVOY | 38 | 0.00 | % | 38 | - | 0.00 | % | |||||||||||||
MS JACQUELINE NICOLLS | 37 | 0.00 | % | 37 | - | 0.00 | % | |||||||||||||
MS GLORIA KIRI WHITE | 37 | 0.00 | % | 37 | - | 0.00 | % | |||||||||||||
MISS AMY ALYCE WHITE | 36 | 0.00 | % | 36 | - | 0.00 | % | |||||||||||||
MR MYLES NORMAN DAVEY | 35 | 0.00 | % | 35 | - | 0.00 | % | |||||||||||||
MR LESLEY DOYLE | 35 | 0.00 | % | 35 | - | 0.00 | % | |||||||||||||
MR GARY JOHN HILL <KURT HILL CAR FUND A/C> | 35 | 0.00 | % | 35 | - | 0.00 | % | |||||||||||||
CHING NG | 35 | 0.00 | % | 35 | - | 0.00 | % | |||||||||||||
DR PHILIP JOSEPH RUARAIGH MCDONALD MOORE | 35 | 0.00 | % | 35 | - | 0.00 | % | |||||||||||||
MS BEVERLEY JUNE HILLIER | 34 | 0.00 | % | 34 | - | 0.00 | % | |||||||||||||
MS CAROLINE JOY WELLS | 34 | 0.00 | % | 34 | - | 0.00 | % | |||||||||||||
MR CRAIG WHITE & MRS JANET WHITE <THE GWANDOBAN S/F A/C> | 34 | 0.00 | % | 34 | - | 0.00 | % | |||||||||||||
MISS ESTHER LYNDAL BREEN | 33 | 0.00 | % | 33 | - | 0.00 | % | |||||||||||||
MR BENJAMIN MARTIN EDWARDS | 33 | 0.00 | % | 33 | - | 0.00 | % | |||||||||||||
MR MARK WISSMANN | 32 | 0.00 | % | 32 | - | 0.00 | % | |||||||||||||
MS SUI MING LEUNG | 31 | 0.00 | % | 31 | - | 0.00 | % | |||||||||||||
MRS REBECCA MCPHERSON & MRS JOHANNA MARIE CHETWYND <LMS INVESTMENT GROUP A/C> | 31 | 0.00 | % | 31 | - | 0.00 | % | |||||||||||||
MR LEON JOHN MUNCE | 31 | 0.00 | % | 31 | - | 0.00 | % | |||||||||||||
MS ANNE LYNETTE HICKS | 30 | 0.00 | % | 30 | - | 0.00 | % | |||||||||||||
MS CHERYL MCEVOY | 30 | 0.00 | % | 30 | - | 0.00 | % | |||||||||||||
MR ERIC R MCKEE & MRS YVONNE E MCKEE <NO 1 A/C> | 30 | 0.00 | % | 30 | - | 0.00 | % | |||||||||||||
MR ERIC R MCKEE & MRS YVONNE E MCKEE <NO 2 A/C> | 30 | 0.00 | % | 30 | - | 0.00 | % | |||||||||||||
MR GAVIN BING LEONG SEETO & MRS CECILIA SING WHYE SEETO <SEETO SUPER FUND A/C> | 30 | 0.00 | % | 30 | - | 0.00 | % | |||||||||||||
MR ROB MCFARLAND | 29 | 0.00 | % | 29 | - | 0.00 | % | |||||||||||||
MR PAUL CARTY | 24 | 0.00 | % | 24 | - | 0.00 | % | |||||||||||||
MAIN STREET REALTY PTY LTD <RYAN FAMILY SUPER FUND A/C> | 23 | 0.00 | % | 23 | - | 0.00 | % | |||||||||||||
MR DAVID BESSON & MRS LIZ BESSON | 15 | 0.00 | % | 15 | - | 0.00 | % | |||||||||||||
MRS MARGIE MCCLEELAND | 12 | 0.00 | % | 12 | - | 0.00 | % | |||||||||||||
MRS DEBBIE HANCOCK | 10 | 0.00 | % | 10 | - | 0.00 | % | |||||||||||||
MR GERARD LAVERY | 3 | 0.00 | % | 3 | - | 0.00 | % | |||||||||||||
1,870,114,012 | 99.87 | % | 172,965,945 | 1,697,148,068 | 90.63 | % |
Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth securities authorized for issuance under any equity compensation plans approved by our shareholders as well as any equity compensation plans not approved by our shareholders as of December 31, 2013.
Plan category |
Number
of
securities to be issued upon exercise of outstanding options, warrants and rights (a) |
Weighted
average
exercise price of outstanding options, warrants and rights |
Number
of securities
remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|||||||||
Plans approved by our shareholders | - | - | - | |||||||||
Plans not approved by shareholders | - | - | - |
The following description of our capital stock is based upon our amended and restated articles of incorporation, as amended, our bylaws and applicable provisions of law, in each case as currently in effect. This discussion does not purport to be complete and is qualified in its entirety by reference to our amended and restated articles of incorporation, as amended, and our bylaws, copies of which are filed with the SEC as exhibits to the registration statement of which this prospectus is a part.
Authorized Capital Stock
As of the date of this prospectus, our authorized capital stock consists of (i) 2,500,000,000 shares of common stock, par value $0.001 per share, and (ii) 50,000,000 shares of preferred stock, par value $0.001 per share. At December 11, 2014, we had 1,872,598,662 shares of common stock issued and outstanding. At December 11, 2014, we had 1,000,000, 410,000, 400,025, 173,000, 461,000 and 1,400,000 shares of Series A, Series B, Series C, Series D, Series E and Series F preferred stock, respectively, issued and outstanding.
Common Stock
The holders of common stock are entitled to one vote per share on all matters submitted to a vote of shareholders, including the election of directors. There is no right to cumulate votes in the election of directors. The holders of common stock are entitled to any dividends that may be declared by the board of directors out of funds legally available for payment of dividends subject to the prior rights of holders of preferred stock and any contractual restrictions we have against the payment of dividends on common stock. In the event of our liquidation or dissolution, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of preferred stock. Holders of common stock have no preemptive rights and have no right to convert their common stock into any other securities.
76 |
Preferred Stock
The preferred stock is issuable in one or more series with such designations, voting powers, if any, preferences and relative, participating, optional or other special rights, and such qualifications, limitations and restrictions, as are determined by resolution of our board of directors. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of our company without further action by shareholders and could adversely affect the rights and powers, including voting rights, of the holders of common stock.
Description of Series A Preferred Stock
Our amended and restated articles of incorporation, as amended, authorizes 1,000,000 shares of Series A preferred stock, 1,000,000 of which are outstanding as of December 11, 2014. There are no sinking fund provisions applicable to our Series A preferred stock.
Ranking. The Series A preferred stock ranks pari passu with any other series of preferred stock designated by the Company and not designated as senior securities or subordinate to the Series A preferred stock
Liquidation Preference. In the event of a liquidation or winding up of the Company, a holder of Series A preferred stock will be entitled to receive $1.00 per share of Series A preferred stock.
Dividends. The Series A preferred stock is entitled to receive 12% per annum dividends, paid monthly.
Conversion. Holders of Series A preferred shares have the following rights with respect to the conversion of Series A preferred shares into shares of our common stock:
● | At any time after December 31, 2014 and upon notice provided by the holder to the Company, a holder has the right to convert, at face value per share, all or any portion of their Series A preferred shares into shares of our common stock on the basis of 400 shares of common stock for each share of Series A preferred stock so converted (the “Series A Conversion Ratio”). | |
● | If at any time after the date of issuance of the Series A preferred stock, in the event the Company (i) makes or issues a dividend or other distribution payable in common stock (other than with respect to the Series A preferred stock); (ii) subdivides outstanding shares of common stock into a larger number of shares; or (iii) combines outstanding shares of common stock into a smaller number of shares; or (iv) conducts a rights offering to its existing shareholders, the Series A Conversion Ratio shall be adjusted appropriately. | |
● | Except as otherwise provided in the amended and restated articles of incorporation, as amended, if the common stock issuable upon the conversion of the Series A preferred stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise, then in each such event, the holder of each share of Series A preferred stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of common stock into which such shares of Series A preferred stock might have been converted immediately prior to such capital reorganization, reclassification or other change. |
Voting. On all matters to come before our shareholders, holders of Series A preferred stock have that number of votes per share (rounded to the nearest whole share) equal to the product of: (a) the number of shares of Series A preferred stock held on the record date for the determination of the holders of the shares entitled to vote, or, if no record date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 1001. The holders of Series A preferred shares vote together with the holders of the outstanding shares of all other capital stock of the Company (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
Redemption and Call Rights. The Series A preferred stock is not subject to any redemption rights on behalf of the Company or subject to call by any holder of Series A preferred stock.
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Description of Series B Preferred Stock
Our amended and restated articles of incorporation, as amended, authorizes 410,000 shares of Series B preferred stock, 410,000 of which are outstanding as of December 11, 2014. There are no sinking fund provisions applicable to our Series B preferred stock.
Ranking. The Series B preferred stock ranks pari passu with any other series of preferred stock designated by the Company and not designated as senior securities or subordinate to the Series B preferred stock .
Liquidation Preference. In the event of a liquidation or winding up of the Company, a holder of Series B preferred stock will be entitled to receive $1.00 per share of Series B preferred stock.
Dividends. The Series B preferred stock is entitled to receive 12% per annum dividends, paid monthly.
Conversion. Holders of Series B preferred shares have the following rights with respect to the conversion of Series B preferred shares into shares of our common stock:
● | On December 31, 2014 and upon notice provided by the holder to the Company, a holder has the right to convert, at face value per share, all or any portion of their Series B preferred shares into shares of our common stock on the basis of 400 shares of common stock for each share of Series B preferred stock so converted, or if the holder elects to convert on December 31, 2015, such shares will be converted on the basis of 66⅔ shares of common stock for each share of Series B preferred stock (the “Series B Conversion Ratio”). | |
● | If at any time after the date of issuance of the Series B preferred stock, in the event the Company (i) makes or issues a dividend or other distribution payable in common stock (other than with respect to the Series B preferred stock); (ii) subdivides outstanding shares of common stock into a larger number of shares; or (iii) combines outstanding shares of common stock into a smaller number of shares; or (iv) conducts a rights offering to its existing shareholders, the Series B Conversion Ratio shall be adjusted appropriately. | |
● | Except as otherwise provided in the amended and restated articles of incorporation, as amended, if the common stock issuable upon the conversion of the Series B preferred stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise, then in each such event, the holder of each share of Series B preferred stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of common stock into which such shares of Series B preferred stock might have been converted immediately prior to such capital reorganization, reclassification or other change. |
Voting. On all matters to come before our shareholders, holders of Series B preferred stock have that number of votes per share (rounded to the nearest whole share) equal to the product of: (a) the number of shares of Series B preferred stock held on the record date for the determination of the holders of the shares entitled to vote, or, if no record date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 200. The holders of Series B preferred shares vote together with the holders of the outstanding shares of all other capital stock of the Company (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
Redemption and Call Rights. Any time after December 31, 2015, the Company has the right, but not the obligation, to redeem all of the unconverted outstanding shares of Series B preferred stock by paying in cash an amount per share equal to $1.00.
Description of Series C Preferred Stock
Our amended and restated articles of incorporation, as amended, authorizes 400,025 shares of Series C preferred stock, 400,025 of which are outstanding as of December 11, 2014. There are no sinking fund provisions applicable to our Series C preferred stock.
Ranking. The Series C preferred stock ranks pari passu with any other series of preferred stock designated by the Company and not designated as senior securities or subordinate to the Series C preferred stock .
Liquidation Preference. In the event of a liquidation or winding up of the Company, a holder of Series C preferred stock will be entitled to receive $1.00 per share of Series C preferred stock.
Dividends. The Series C preferred stock is entitled to receive 12% per annum dividends, paid monthly.
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Conversion. Holders of Series C preferred shares have the following rights with respect to the conversion of Series C preferred shares into shares of our common stock:
● | On December 31, 2014 and upon notice provided by the holder to the Company, a holder has the right to convert, at face value per share, all or any portion of their Series C preferred shares into shares of our common stock on the basis of 200 shares of common stock for each share of Series C preferred stock so converted, or if the holder elects to convert on December 31, 2015, such shares will be converted on the basis of 57.1428 shares of common stock for each share of Series C preferred stock (the “Series C Conversion Ratio”). | |
● | If at any time after the date of issuance of the Series C preferred stock, in the event the Company (i) makes or issues a dividend or other distribution payable in common stock (other than with respect to the Series C preferred stock); (ii) subdivides outstanding shares of common stock into a larger number of shares; or (iii) combines outstanding shares of common stock into a smaller number of shares; or (iv) conducts a rights offering to its existing shareholders, the Series C Conversion Ratio shall be adjusted appropriately. | |
● | Except as otherwise provided in the amended and restated articles of incorporation, as amended, if the common stock issuable upon the conversion of the Series C preferred stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise, then in each such event, the holder of each share of Series C preferred stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of common stock into which such shares of Series C preferred stock might have been converted immediately prior to such capital reorganization, reclassification or other change. |
Voting. On all matters to come before our shareholders, holders of Series C preferred stock have that number of votes per share (rounded to the nearest whole share) equal to the product of: (a) the number of shares of Series C preferred stock held on the record date for the determination of the holders of the shares entitled to vote, or, if no record date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 100. The holders of Series C preferred shares vote together with the holders of the outstanding shares of all other capital stock of the Company (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
Redemption and Call Rights. Any time after December 31, 2015, the Company has the right, but not the obligation, to redeem all of the unconverted outstanding shares of Series C preferred stock by paying in cash an amount per share equal to $1.00.
Description of Series D Preferred Stock
Our amended and restated articles of incorporation, as amended, authorizes 173,000 shares of Series D preferred stock, 173,000 of which are outstanding as of December 11, 2014. There are no sinking fund provisions applicable to our Series D preferred stock.
Ranking. The Series D preferred stock ranks pari passu with any other series of preferred stock designated by the Company and not designated as senior securities or subordinate to the Series D preferred stock .
Liquidation Preference. In the event of a liquidation or winding up of the Company, a holder of Series D preferred stock will be entitled to receive $1.00 per share of Series D preferred stock.
Dividends. The Series D preferred stock is entitled to receive 12% per annum dividends, paid monthly.
Conversion. Holders of Series D preferred shares have the following rights with respect to the conversion of Series D preferred shares into shares of our common stock:
● | On December 31, 2014 and upon notice provided by the holder to the Company, a holder has the right to convert, at face value per share, all or any portion of their Series D preferred shares into shares of our common stock on the basis of 133.3333 shares of common stock for each share of Series D preferred stock so converted, or if the holder elects to convert on December 31, 2015, such shares will be converted on the basis of 50 shares of common stock for each share of Series D preferred stock (the “Series D Conversion Ratio”). | |
● | If at any time after the date of issuance of the Series D preferred stock, in the event the Company (i) makes or issues a dividend or other distribution payable in common stock (other than with respect to the Series C preferred stock); (ii) subdivides outstanding shares of common stock into a larger number of shares; or (iii) combines outstanding shares of common stock into a smaller number of shares; or (iv) conducts a rights offering to its existing shareholders, the Series D Conversion Ratio shall be adjusted appropriately. |
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● | Except as otherwise provided in the amended and restated articles of incorporation, as amended, if the common stock issuable upon the conversion of the Series D preferred stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise, then in each such event, the holder of each share of Series D preferred stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of common stock into which such shares of Series D preferred stock might have been converted immediately prior to such capital reorganization, reclassification or other change. |
Voting. On all matters to come before our shareholders, holders of Series D preferred stock have that number of votes per share (rounded to the nearest whole share) equal to the product of: (a) the number of shares of Series D preferred stock held on the record date for the determination of the holders of the shares entitled to vote, or, if no record date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 67. The holders of Series D preferred shares vote together with the holders of the outstanding shares of all other capital stock of the Company (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
Redemption and Call Rights. Any time after December 31, 2015, the Company has the right, but not the obligation, to redeem all of the unconverted outstanding shares of Series D preferred stock by paying in cash an amount per share equal to $1.00.
Description of Series E Preferred Stock
Our amended and restated articles of incorporation, as amended, authorizes 461,000 shares of Series E preferred stock, 461,000 of which are outstanding as of December 11, 2014. There are no sinking fund provisions applicable to our Series E preferred stock.
Ranking. The Series E preferred stock ranks pari passu with any other series of preferred stock designated by the Company and not designated as senior securities or subordinate to the Series E preferred stock .
Liquidation Preference. In the event of a liquidation or winding up of the Company, a holder of Series E preferred stock will be entitled to receive $1.00 per share of Series E preferred stock.
Dividends. The Series E preferred stock is entitled to receive 12% per annum dividends, paid monthly.
Conversion. Holders of Series E preferred shares have the following rights with respect to the conversion of Series E preferred shares into shares of our common stock:
● | On December 31, 2014 and upon notice provided by the holder to the Company, a holder has the right to convert, at face value per share, all or any portion of their Series E preferred shares into shares of our common stock on the basis of 40 shares of common stock for each share of Series E preferred stock so converted, or if the holder elects to convert on December 31, 2015, such shares will be converted on the basis of 25 shares of common stock for each share of Series E preferred stock (the “Series E Conversion Ratio”). | |
● | If at any time after the date of issuance of the Series E preferred stock, in the event the Company (i) makes or issues a dividend or other distribution payable in common stock (other than with respect to the Series C preferred stock); (ii) subdivides outstanding shares of common stock into a larger number of shares; or (iii) combines outstanding shares of common stock into a smaller number of shares; or (iv) conducts a rights offering to its existing shareholders, the Series E Conversion Ratio shall be adjusted appropriately. | |
● | Except as otherwise provided in the amended and restated articles of incorporation, as amended, if the common stock issuable upon the conversion of the Series E preferred stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise, then in each such event, the holder of each share of Series E preferred stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of common stock into which such shares of Series E preferred stock might have been converted immediately prior to such capital reorganization, reclassification or other change. |
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Voting. On all matters to come before our shareholders, holders of Series E preferred stock have that number of votes per share (rounded to the nearest whole share) equal to the product of: (a) the number of shares of Series E preferred stock held on the record date for the determination of the holders of the shares entitled to vote, or, if no record date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 40. The holders of Series E preferred shares vote together with the holders of the outstanding shares of all other capital stock of the Company (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
Redemption and Call Rights. Any time after December 31, 2015, the Company has the right, but not the obligation, to redeem all of the unconverted outstanding shares of Series E preferred stock by paying in cash an amount per share equal to $1.00.
Description of Series F Preferred Stock
Our amended and restated articles of incorporation, as amended, authorizes 1,500,000 shares of Series F preferred stock, 1,400,000 of which are outstanding as of December 11, 2014. There are no sinking fund provisions applicable to our Series F preferred stock.
Ranking. The Series F preferred stock ranks pari passu with any other series of preferred stock subsequently designated by the Company and not designated as senior securities or subordinate to the Series F preferred stock .
Liquidation Preference. In the event of a liquidation or winding up of the Company, a holder of Series F preferred stock will be entitled to receive $1.00 per share of Series F preferred stock.
Dividends. The Series F preferred stock is entitled to receive 12% per annum dividends, paid monthly.
Conversion. Holders of Series F preferred shares have the following rights with respect to the conversion of Series F preferred shares into shares of our common stock:
● | On December 31, 2015 and upon notice provided by the holder to the Company, a holder has the right to convert, at face value per share, all or any portion of their Series F preferred shares into shares of our common stock on the basis of 33.3333 shares of common stock for each share of Series F preferred stock so converted (the “Series F Conversion Ratio”). | |
● | If at any time after the date of issuance of the Series F preferred stock, in the event the Company (i) makes or issues a dividend or other distribution payable in common stock (other than with respect to the Series F preferred stock); (ii) subdivides outstanding shares of common stock into a larger number of shares; or (iii) combines outstanding shares of common stock into a smaller number of shares; or (iv) conducts a rights offering to its existing shareholders, the Series F Conversion Ratio shall be adjusted appropriately. | |
● | Except as otherwise provided in the amended and restated articles of incorporation, as amended, if the common stock issuable upon the conversion of the Series F preferred stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise, then in each such event, the holder of each share of Series F preferred stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of common stock into which such shares of Series F preferred stock might have been converted immediately prior to such capital reorganization, reclassification or other change. |
Voting. On all matters to come before our shareholders, holders of Series F preferred stock have that number of votes per share (rounded to the nearest whole share) equal to the product of: (a) the number of shares of Series F preferred stock held on the record date for the determination of the holders of the shares entitled to vote, or, if no record date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 34. The holders of Series F preferred shares vote together with the holders of the outstanding shares of all other capital stock of the Company (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
Redemption and Call Rights. Any time after December 31, 2015, the Company has the right, but not the obligation, to redeem all of the unconverted outstanding shares of Series F preferred stock by paying in cash an amount per share equal to $1.00.
Transfer Agent
The transfer agent and registrar for our common stock is VStock Transfer, 77 Spruce Street, Suite 201, Cedarhurst, NY, 11516.
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The validity of the securities offered by this prospectus will be passed upon for us by Legal & Compliance, LLC, 330 Clematis Street, Suite 217, West Palm Beach, Florida 33401.
Our consolidated balance sheets as of December 31, 2013 and 2012 and the related consolidated statement of operations, changes in shareholders’ equity and cash flows for the years ended December 31, 2013 and 2012 included in this prospectus have been audited by Rose, Snyder & Jacobs LLP, independent registered public accounting firm, as indicated in their report with respect thereto, and have been so included in reliance upon the report of such firm given on their authority as experts in accounting and auditing.
DISCLOSURE OF COMMISSION’S POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our directors and officers are indemnified as provided by Florida law and our bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC the registration statement on Form S-1 under the Securities Act for the common stock offered by this prospectus. This prospectus, which is a part of the registration statement, does not contain all of the information in the registration statement and the exhibits filed with it, portions of which have been omitted as permitted by SEC rules and regulations. For further information concerning us and the securities offered by this prospectus, we refer to the registration statement and to the exhibits filed with it. Statements contained in this prospectus as to the content of any contract or other document referred to are not necessarily complete. In each instance, we refer you to the copy of the contracts and/or other documents filed as exhibits to the registration statement.
The registration statement on Form S-1, of which this prospectus forms a part, including exhibits, is available at the SEC’s website at http://www.sec.gov. You may also read and copy any document we file with, or furnish to, the SEC at its public reference facilities:
Public Reference Room Office | |
100 F Street, N.E. | |
Room 1580 | |
Washington, D.C. 20549 |
You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Callers in the United States can also call (202) 551-8090 for further information on the operations of the public reference facilities.
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F- 1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
IEG Holdings Corporation
We have audited the accompanying consolidated financial statements of IEG Holdings Corporation and subsidiaries (collectively the “Company”) which comprise the consolidated balance sheets as of December 31, 2013 and 2012, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and related notes to the consolidated financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America as established by the Auditing Standards Board (United States) and in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of IEG Holdings Corporation and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis-of-matter Regarding Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred significant operating losses and negative cash flow from operations since inception. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to that matter.
Rose, Snyder & Jacobs LLP
Encino, California April 11, 2014
15821 VENTURA BOULEVARD, SUITE 490, ENCINO, CALIFORNIA 91436 PHONE: (818) 461 - 0600 ● FAX: (818) 461 - 0610
F- 2 |
IEG HOLDINGS CORPORATION
DECEMBER 31, 2013 AND DECEMBER 31, 2012
See report of independent registered public accounting firm and notes to consolidated financial statements.
F- 3 |
IEG HOLDINGS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
2013 | 2012 | |||||||
REVENUES | ||||||||
Interest revenue | $ | 56,585 | $ | 28,950 | ||||
Other revenue | 6,364 | 8,829 | ||||||
TOTAL REVENUES | 62,949 | 37,779 | ||||||
OPERATING EXPENSES | ||||||||
Salaries and wages | 1,345,243 | 1,680,264 | ||||||
Consulting fees | 462,771 | 64,923 | ||||||
Rent | 290,985 | 215,856 | ||||||
General and administrative | 277,165 | 114,455 | ||||||
Utilities | 129,225 | 76,202 | ||||||
Professional fees | 100,924 | 21,687 | ||||||
Travel and marketing | 79,964 | 127,906 | ||||||
Provision for credit losses | 63,492 | 20,340 | ||||||
Depreciation and amortization | 36,885 | 81,664 | ||||||
Insurance | 24,823 | 51,364 | ||||||
Office and miscellaneous | 15,350 | 17,790 | ||||||
Licenses and taxes | 13,066 | 11,542 | ||||||
Repairs | 5,646 | 10,327 | ||||||
Startup costs, note 8 | 1,500,000 | - | ||||||
TOTAL OPERATING EXPENSES | 4,345,539 | 2,494,321 | ||||||
LOSS FROM OPERATIONS | (4,282,590 | ) | (2,456,542 | ) | ||||
OTHER INCOME (EXPENSE) | ||||||||
Miscellaneous income | 510 | 129 | ||||||
Interest expense | (195,895 | ) | (51,109 | ) | ||||
TOTAL OTHER INCOME (EXPENSE) | (195,385 | ) | (50,980 | ) | ||||
NET LOSS | $ | (4,477,975 | ) | $ | (2,507,522 | ) | ||
Net loss per share, basic and diluted | $ | (0.01 | ) | $ | (0.01 | ) | ||
Weighted average number of shares, basic and diluted | 618,849,992 | 272,447,137 |
See report of independent registered public accounting firm and notes to consolidated financial statements.
F- 4 |
IEG HOLDINGS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
Common Stock | Additional | Accumulated | ||||||||||||||||||
Shares | Amount | Paid-in Capital | Deficit | Total | ||||||||||||||||
Balance, January 1, 2012 | 272,447,137 | $ | 272,447 | $ | 1,720,746 | $ | (2,296,001 | ) | $ | (302,808 | ) | |||||||||
Capital contributions from parent | - | - | 1743415 | - | 1,743,415 | |||||||||||||||
Net loss | - | - | - | (2,507,522 | ) | (2,507,522 | ) | |||||||||||||
Balance, December 31, 2012 | 272,447,137 | 272,447 | 3,464,161 | (4,803,523 | ) | (1,066,915 | ) | |||||||||||||
Issuance of shares at $0.02 and $0.03 | 12,491,916 | 12,492 | 287,265 | - | 299,757 | |||||||||||||||
Issuance of shares at $0.005 | 664,299,127 | 664,299 | 2,579,378 | - | 3,243,677 | |||||||||||||||
Shares issued for pre-merger shares of shell | 7,484,650 | 7,485 | (7,485 | ) | - | - | ||||||||||||||
Net loss | - | - | - | (4,477,975 | ) | (4,477,975 | ) | |||||||||||||
Balance, December 31, 2013 | 956,722,830 | $ | 956,723 | $ | 6,323,319 | $ | (9,281,498 | ) | $ | (2,001,456 | ) |
See report of independent registered public accounting firm and notes to consolidated financial statements.
F- 5 |
IEG HOLDINGS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
2013 | 2012 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (4,477,975 | ) | $ | (2,507,522 | ) | ||
Adjustments to reconcile net loss | ||||||||
to net cash used in operating activities: | ||||||||
Provision for credit losses | 63,462 | 20,340 | ||||||
Depreciation and amortization | 36,885 | 81,664 | ||||||
Amortization of loan costs | 48,281 | 25,734 | ||||||
Changes in assets - (increase) decrease: | ||||||||
Deposits | (4,875 | ) | 1,473 | |||||
Loan Costs | (15,450 | ) | (20,000 | ) | ||||
Changes in liabilities - increase (decrease): | ||||||||
Accounts payable and accrued expenses | 373,964 | (12,833 | ) | |||||
Deferred salary | 952,903 | 803,847 | ||||||
Deferred rent | - | 15,984 | ||||||
Charge for Rights Sales Agreement | 1,500,000 | - | ||||||
NET CASH USED IN OPERATING ACTIVITIES | (1,522,805 | ) | (1,591,313 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Loans receivable originated | (403,000 | ) | (126,000 | ) | ||||
Loans receivable repaid | 43,911 | 25,384 | ||||||
Purchases of property and equipment | - | (12,982 | ) | |||||
Advance to officer | (267,832 | ) | (203,119 | ) | ||||
Advances to IEG Holdings Limited ACN 131 987 838 | (966,620 | ) | - | |||||
NET CASH USED IN INVESTING ACTIVITIES | (1,593,541 | ) | (316,717 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from long-term debt | 250,000 | 199,965 | ||||||
Proceeds from short-term loans | 500,000 | - | ||||||
Payments on short-term loans | (360,000 | ) | - | |||||
Deposit on preferred shares to be issued | 936,763 | - | ||||||
Proceeds from issuance of common stock | 1,892,861 | - | ||||||
Capital contributions | - | 1,743,415 | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 3,219,624 | 1,943,380 | ||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 103,278 | 35,350 | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 178,601 | 143,251 | ||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 281,879 | $ | 178,601 | ||||
Supplemental disclosures: | ||||||||
Interest paid in cash | $ | 94,125 | $ | 21,525 | ||||
Income taxes paid in cash | $ | - | $ | - | ||||
Deposit on preferred shares in lieu of deferred salary | $ | 914,011 | $ | - | ||||
Issuance of common stock in lieu of payment of deferred salary | $ | 1,172,823 | $ | - |
See report of independent registered public accounting firm and notes to consolidated financial statements.
F- 6 |
IEG HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The principal business activity of the Company is providing unsecured consumer loans ranging from $2,000 - $10,000 under the consumer brand “Mr. Amazing Loans”. The Company is headquartered in Las Vegas, Nevada and originates direct consumer loans in the states of Nevada, Florida, Illinois and Arizona via its online platform and distribution network. The Company is a fully licensed consumer installment loan provider in the four states in which it operates and offers all loans within the prevailing statutory rates.
Organization and Basis of Accounting
Investment Evolution Global Corporation (“IEGC”) was incorporated in the state of Delaware on February 20, 2008. On March 14, 2013, IEGC consummated a reverse merger transaction with IEG Holdings Corporation (“IEG Holdings”) (f/k/a Ideal Accents, Inc.). As a result of the reverse merger, the shareholders of IEGC received 90,815.71 shares of common stock in IEG Holdings for each share of IEGC, so that they own approximately 99.1% of the issued and outstanding common shares of IEG Holdings immediately after the transaction. For accounting purposes, the reverse merger has been treated as an acquisition of IEG Holdings by IEGC (the accounting acquirer) and a recapitalization of IEGC. Immediately prior to the reverse merger, IEG Holdings effected a 1-for-6 reverse stock split.
The financial statements have been restated to retroactively reflect the number of shares of IEGC, using the capital structure of IEG Holdings and to present the accumulated deficit of IEGC as of the date of the merger.
These consolidated financial statements include the operations of IEG Holdings Corporation and its wholly-owned subsidiaries Investment Evolution Global Corporation, Investment Evolution Corporation, IEC SPV, LLC, and Investment Evolution Australia Corporation (collectively the “Company”). All inter-company transactions and balances have been eliminated in consolidation.
The Company’s accounting and reporting policies are in accordance with U.S. generally accepted accounting principles and conform to general practices within the consumer finance industry.
Going Concern
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has reported recurring losses and has not generated positive net cash flows from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management intends to raise capital funding sufficient to continue operations through January 2015 via a public offering of equity and unsecured notes. This additional working capital will enable the Company to increase loan volume utilizing its existing $10 million credit facility. If the Company is not successful in raising sufficient capital, it may have to delay or reduce expenses, or curtail operations. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that could result should the Company not continue as a going concern.
F- 7 |
IEG HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures. Management uses its historical records and knowledge of its business in making these estimates. Accordingly, actual results may differ from these estimates.
Cash and Cash Equivalents
For the purpose of the statement of cash flows, the Company considers cash equivalents to include short-term, highly liquid investments with an original maturity of three months or less.
Loans Receivable and Interest Income
The Company is licensed to originate consumer loans in the states of Nevada, Florida, Illinois and Arizona. During fiscal 2013 and 2012, the Company originated $2,000, $3,000, $5,000 and $10,000 loans with terms ranging from three to five years. The Company offers its loans at or below the prevailing statutory rates. Loans are carried at the unpaid principal amount outstanding, net of an allowance for credit losses.
The Company calculates interest revenue using the interest yield method. Charges for late payments are credited to income when collected. Application fees are insignificant.
Accrual of interest income on loans receivable is suspended when no payment has been received on account for 60 days or more on a contractual basis, at which time a loan is considered delinquent. Loans are returned to active status and accrual of interest income is resumed when all of the principal and interest amounts contractually due are brought current; at which time management believes future payments are reasonably assured. At December 31, 2013, three loans with a total balance of $11,526 were delinquent.
Allowance for Credit Losses
The Company maintains an allowance for credit losses due to the fact that it is probable that a portion of the loans receivable will not be collected. The allowance is estimated by management based on various factors, including specific circumstances of the individual loans, management’s knowledge of the industry, and the experience and trends of other companies in the same industry.
Impaired Loans
The Company defines impaired loans as bankrupt accounts and accounts that are 184 days or more past due. In accordance with the Company’s charge-off policy, once a loan is deemed uncollectible, 100% of the remaining balance is charged-off. Loans can also be charged off when deemed uncollectable due to consumer specific circumstances.
Property and Equipment
Property and equipment are stated at cost. Depreciation and amortization are being provided using the straight-line method over the estimated useful lives of the assets as follows:
Classification
Life |
||
Computer equipment | 3-5 years | |
Furniture and fixtures | 8 years |
F- 8 |
IEG HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property and Equipment (Continued)
The Company amortizes its leasehold improvements over the shorter of their economic lives, which are generally five years, or the lease term that considers renewal periods that are reasonably assured. Expenses for repairs and maintenance are charged to expense as incurred, while renewals and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.
Operating Leases
The Company’s office leases typically have a lease term of three to five years and contain lessee renewal options and cancellation clauses in the event of regulatory changes.
Loan Costs
Loan costs consist of the cost of acquiring the $3 million credit facility and the cost of increasing the facility from $3 million to $10 million, including broker success fees and legal fees. These costs are amortized over four years, the period of the credit facility. Accumulated amortization of loan costs amounted to $74,015 and $25,734 at December 31, 2013 and 2012, respectively.
Income Taxes
We account for income taxes using the liability method in accordance with FASB Accounting Standards Codification (“ASC”) 740 “Income Taxes”. To date, no current income tax liability has been recorded due to our accumulated net losses. Deferred income tax assets and liabilities are recognized for temporary differences between the financial statement carrying amounts of assets and liabilities and the amounts that are reported in the income tax returns. Our net deferred income tax assets have been fully reserved by a valuation allowance due to the uncertainty of our ability to realize future taxable income and to recover our net deferred income tax assets.
Advertising Costs
Advertising costs are expensed as incurred and are included in general administrative expenses. Advertising costs amounted to $77,380 and $63,030 at December 31, 2013 and 2012, respectively.
Earnings and loss per Share
The Company computes net earnings (loss) per share in accordance with ASC 260-10. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares, if any, had been issued and if the additional common shares were dilutive. The number of shares have been restated retroactively to reflect the number of shares using the capital structure of IEG Holdings.
Fair Value of Financial Instruments
The Company has adopted guidance issued by the FASB that defines fair value, establishes a framework for measuring fair value in accordance with existing generally accepted accounting principles, and expands disclosures about fair value measurements. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The categories are as follows:
F- 9 |
IEG HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fair Value of Financial Instruments (Continued)
Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date.
At December 31, 2013 and 2012, the only financial instruments that are subject to these classifications are cash and cash equivalents, which are considered Level I assets.
Carrying amounts reported in the consolidated balance sheets for advances to officer, and accounts payable and accrued expenses approximate fair value because of their immediate or short-term nature. The fair value of borrowings is not considered to be significantly different than its carrying amount because the stated rates for such debt reflect current market rates and conditions.
2. LOANS RECEIVABLE
Loans receivable consisted of the following at December 31:
2013 | 2012 | |||||||
Loans receivable | $ | 487,432 | $ | 148,263 | ||||
Allowance for credit losses | (61,319 | ) | (17,777 | ) | ||||
Loans receivable, net | 426,113 | 130,486 | ||||||
Loan receivables, current | 64,719 | 18,482 | ||||||
Loan receivables, non current | $ | 361,394 | $ | 112,004 |
A reconciliation of the allowance for credit losses consist of the following at December 31:
2013 | 2012 | |||||||
Beginning balance | $ | 17,777 | $ | 6,840 | ||||
Provision for credit losses | 63,492 | 20,340 | ||||||
Loans charged off | (19,950 | ) | (9,403 | ) | ||||
Ending balance | $ | 61,319 | $ | 17,777 |
F- 10 |
IEG HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012
3. PROPERTY AND EQUIPMENT
At December 31, 2013 and 2012, property and equipment consists of the following:
2013 | 2012 | |||||||
Computer equipment | $ | 120,513 | $ | 120,513 | ||||
Furniture and fixtures | 13,314 | 13,314 | ||||||
Leasehold improvements | 57,980 | 57,980 | ||||||
191,807 | 191,807 | |||||||
Less accumulated depreciation and amortization | 148,458 | 111,572 | ||||||
Total | $ | 43,349 | $ | 80,235 |
Depreciation of property and equipment amounted to $36,885 and $81,664 during the years ended December 31, 2013 and 2012, respectively, are included in the accompanying statements of operations in operating expenses.
4. LONG TERM DEBT
The Company has a credit facility that provides for borrowings of up to $10 million with $500,000 outstanding at December 31, 2013, subject to a borrowing base formula. The Company may borrow, at its option, at the rate of 18% with a minimum advance of $25,000. As of December 31, 2013 the Company’s effective interest rate was 18% and the unused amount available under the credit line was $9.5 million. Proceeds from this credit facility are used to fund loans to consumers. The credit facility features a 24 month revolving period commencing July 1, 2012 during which interest only payments are due. Commencing July 1, 2014, the facility converts to a term loan with monthly interest and principal payments, and a maturity date of June 1, 2016. The payment amounts are equal to 100% of the consumer loan proceeds.
Substantially all of the Company’s assets are pledged as collateral for borrowings under the revolving credit agreement.
Future minimum payments on the credit facility at December 31, 2013 are as follows:
Years ending
December 31, 2013 |
||||
2014 | $ | 114,562 | ||
2015 | 245,326 | |||
2016 | 140,112 | |||
$ | 500,000 |
F- 11 |
IEG HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012
5. WORKING CAPITAL LOANS
On March 19, 2013, the Company secured a $220,000 working capital loan to expand from Clem Tacca. The Company repaid $264,000 to Clem Tacca on June 10, 2013 which comprised full repayment of $220,000 loan principal and a $44,000 facility fee recorded as interest expense.
On September 6, 2013, the Company secured an additional $180,000 working capital loan from Clem Tacca. The Company repaid $90,000 on November 6, 2013 and $50,000 on December 16, 2013. As at December 31, 2013, a balance of $40,000 remains outstanding. This amount is due March 31, 2014, at which time the facility fee of $22,000 is also due.
On October 15, 2013, the Company secured a $100,000 loan from Domenic Tacca Pty Ltd. The balance of $100,000 remains outstanding at year end. This amount is due April 14, 2014. Facility fee totaling $30,000 will also be paid in 2014.
The effective interest rate on these notes is 35.6% for the year ended December 31, 2013.
6. STOCKHOLDERS’ EQUITY
The aggregate number of shares which the Company has the authority to issue is 1,050,000,000 shares, of which 1,000,000,000 shares are common stock, par value $0.001 per share, and 50,000,000 shares are preferred stock, par value $0.001 per share. The Board of Directors is authorized at any time, and from time to time, to provide for the issuance of Preferred Stock in one or more series, and to determine the designations, preferences, limitations and relative or other rights of the Preferred Stock or any series thereof.
The stockholders’ equity has been restated to retroactively reflect the number of shares of Investment Evolution Global Corporation, using the capital structure of IEG Holdings Corporation and to present the accumulated deficit of Investment Evolution Global Corporation as of the date of the merger.
During the year ended December 31, 2013, the Company issued 12,491,916 shares at a price of $0.02 and $0.03 per share, and 664,299,127 shares at $0.005 per share in accordance with a rights offering to the pre-merger existing stockholders of the Company.
7. INCOME TAXES
The difference between income tax expense attributable to continuing operations and the amount of income tax expense that would result from applying domestic federal statutory rates to pre-tax income (loss) is mainly related to an increase in the valuation allowance. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. Deferred income tax assets are mainly related to net operating loss carryforwards.
Management has chosen to take a 100% valuation allowance against the deferred income tax asset until such time as management believes that its projections of future profits make the realization of the deferred income tax assets more likely than not. Significant judgment is required in the evaluation of deferred income tax benefits and differences in future results from management’s estimates could result in material differences.
As of December 31, 2013, the Company is in the process of determining the amount of loss carryforwards that may potentially be used to offset future Federal taxable income, which will expire through 2033. In the event of statutory ownership changes, the amount of net operating loss carryforwards that may be utilized in future years is subject to significant limitations.
F- 12 |
IEG HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012
7. INCOME TAXES (Continued)
The Company has adopted guidance issued by the FASB that clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold of more likely than not and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities. The Company’s policy is to include interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties totaled $0 for the years ended December 31, 2013 and 2012. The Company files income tax returns with the Internal Revenue Service (“IRS”) and the states of Nevada, Florida, Illinois and Arizona. All of the Company’s tax filings are still subject to examination. The Company's net operating loss carryforwards are subject to IRS examination until they are fully utilized and such tax years are closed.
8. RELATED PARTY TRANSACTIONS
At December 31, 2013 the Company no longer had advances due from its Chief Executive Officer, which aggregated $203,119 at December 31, 2012. At December 31, 2013, the Company also no longer had deferred salary owed to its Chief Executive Officer, which aggregated $1,401,763 at December 31 2012. The deferred salary, net of the advances were treated as consideration for shares of common stock issued, and deposit on preferred stock to be issued.
Rights Sales Agreement
Effective June 30, 2013, the Company entered into a Rights Sales Agreement, under which the Company acquired the Australian rights to conduct business throughout Australia, from IEG Holdings Limited ACN 131 987 838, its parent (until its shares were distributed to the ultimate shareholders of IEG Holdings Limited ACN 131 987 838).
The purchase price for the Rights Sales Agreement was $1,500,000 which was paid as follows:
Paid through advances to (payments to third parties made on behalf of) IEG Holdings Limited ACN 131 987 838 | $ | 1,074,937 | ||
Offset amounts owed from Company shareholders who are also creditors of IEG Holdings Limited ACN 131 987 838 | $ | 425,063 |
The cost of the Rights Sales Agreement was recorded as start-up costs in the statements of operations in accordance with ASC 720-15-25.
9. CONCENTRATION OF CREDIT RISK
The Company’s portfolio of finance receivables is with consumers living throughout Nevada, Florida, Arizona and Illinois and consequently such consumers’ ability to honor their installment contracts may be affected by economic conditions in these areas.
The Company maintains cash at financial institutions which may, at times, exceed federally insured limits.
F- 13 |
IEG HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012
10. COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company leases its operating facilities under non-cancelable operating leases that expire through August 2016. Total rent expense for the years ended December 31, 2013 and 2012 was $290,985 and $207,856, respectively. The Company is responsible for certain operating expenses in connection with these leases. The following is a schedule, by year, of future minimum rental payments required under non-cancelable operating leases in excess of one year as of December 31, 2013:
Years ending December 31, | ||||
2014 | $ | 180,556 | ||
2015 | $ | 169,067 | ||
2016 | $ | 83,755 |
The Chicago, Phoenix and West Palm Beach offices were vacated in 2013 after obtaining special approval from the Illinois, Arizona and Florida Commissioners to operate the state licenses without having a physical office location in each state. The Company is currently looking to sublease these properties which would reduce future required rental payments. The Company is now able to fully service all four states using its online platform and distribution network and operates solely out of its centralized Las Vegas operational headquarters.
Legal Matters
From time to time, the Company may get involved in legal proceedings in the normal course of its business. The Company is not involved in any legal proceedings at the present time.
Regulatory Requirements
State statutes authorizing the Company’s products and services typically provide state agencies that regulate banks and financial institutions with significant regulatory powers to administer and enforce the law. Under statutory authority, state regulators have broad discretionary power and may impose new licensing requirements, interpret or enforce existing regulatory requirements in different ways, or issue new administrative rules. In addition, when the staff of state regulatory bodies change, it is possible that the interpretations of applicable laws and regulations may also change.
11. REVERSE MERGER
On January 25, 2013, Investment Evolution Global Corporation (“IEGC”) entered into a stock exchange agreement (the “Stock Exchange Agreement”) among IEGC, its sole shareholder IEG Holdings Limited, an Australian company (“IEG”) and IEG Holdings Corporation (f/k/a Ideal Accents, Inc.), a Florida corporation (“IEG Holdings”). Under the terms of the Stock Exchange Agreement, IEG Holdings agreed to acquire a 100% interest in the Company for 272,447,137 shares of IEG Holdings’ common stock after giving effect to a 1 for 6 reverse stock split. On February 14, 2013 IEG Holdings filed the Amended Articles with the Secretary of State of Florida changing its name from Ideal Accents, Inc. to IEG Holdings Corporation, increasing the number of shares of its authorized common stock to 1,000,000,000, $.001 par value, creation of 50,000,000 shares of “blank-check” preferred stock and effectuating a 1 for 6 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”) pursuant to the terms of the Stock Exchange Agreement. FINRA approved the IEG Holdings Amended Articles on March 11, 2013.
F- 14 |
IEG HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012
11. REVERSE MERGER (Continued)
On March 13, 2013 IEG Holdings completed the acquisition of IEGC under the terms of the Stock Exchange Agreement and issued to IEG 272,447,137 shares of IEG Holdings common stock after giving effect to the Reverse Stock Split whereby IEG Holdings acquired a 100% interest in the Company. As a result of the ownership interests of IEG in IEG Holdings and its former ownership interest in the Company, for financial statement reporting purposes, the acquisition of the Company by IEG Holdings has been treated as a reverse merger with a public shell, with the Company being the accounting acquirer.
12. SUBSEQUENT EVENTS
On March 31, 2014 the Company issued 1,983,025 of preferred shares at a price of $1 per share with an annual dividend payable of 12%.
The Company has evaluated events occurring after the date of the accompanying balance sheet through April 11, 2014, the date the consolidated financial statements were available to be issued.
F- 15 |
IEG HOLDINGS CORPORATION
SEPTEMBER 30, 2014 AND DECEMBER 31, 2013
See the accompanying notes to consolidated financial statements.
F- 16 |
IEG HOLDINGS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013 (UNAUDITED)
Three Months | Nine Months | |||||||||||||||
September 30, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | |||||||||||||
REVENUES | ||||||||||||||||
Interest revenue | $ | 144,059 | $ | 13,313 | $ | 237,519 | $ | 35,024 | ||||||||
Other revenue | $ | 1,100 | 354 | 2,313 | 3,429 | |||||||||||
TOTAL REVENUES | 145,160 | 13,667 | 239,832 | 38,453 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Salaries and wages | 914,610 | 347,562 | 1,655,392 | 1,038,267 | ||||||||||||
Rent | 69,404 | 67,530 | 192,189 | 208,412 | ||||||||||||
Consulting | 118,955 | 83,158 | 708,023 | 159,428 | ||||||||||||
General and administrative | 152,803 | 31,426 | 322,638 | 98,744 | ||||||||||||
Professional fees | 26,465 | 5,243 | 128,942 | 65,674 | ||||||||||||
Telephone and utilities | 27,493 | 27,317 | 81,082 | 70,890 | ||||||||||||
Marketing and travel | 165,941 | 59,973 | 574,469 | 92,855 | ||||||||||||
Depreciation and amortization | 54,914 | 3,694 | 68,803 | 32,719 | ||||||||||||
Provision for credit losses | 142,182 | 15,839 | 344,558 | 31,786 | ||||||||||||
Insurance | 3,968 | 6,895 | 10,188 | 21,255 | ||||||||||||
Licenses and taxes | 13,557 | 1,925 | 43,631 | 10,679 | ||||||||||||
Office and miscellaneous | 7,135 | 5,273 | 15,700 | 10,281 | ||||||||||||
Repairs | 3,672 | 1,574 | 6,317 | 5,174 | ||||||||||||
Startup costs, note 10 | - | - | - | 1,500,000 | ||||||||||||
TOTAL OPERATING EXPENSES | 1,701,098 | 657,409 | 4,151,932 | 3,346,164 | ||||||||||||
LOSS FROM OPERATIONS | (1,555,939 | ) | (643,742 | ) | (3,912,100 | ) | (3,307,711 | ) | ||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest expense | (100,971 | ) | (53,196 | ) | (334,666 | ) | (143,726 | ) | ||||||||
Other expenses | (14,248 | ) | - | (62,196 | ) | - | ||||||||||
TOTAL OTHER INCOME (EXPENSE) | (115,219 | ) | (53,196 | ) | (396,862 | ) | (143,726 | ) | ||||||||
NET LOSS | $ | (1,671,158 | ) | $ | (696,938 | ) | $ | (4,308,962 | ) | $ | (3,451,437 | ) | ||||
Net loss per share, basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | ||||
Weighted average number of shares, basic and diluted | 1,571,178,873 | 804,937,297 | 1,166,803,519 | 578,728,669 |
See the accompanying notes to consolidated financial statements.
F- 17 |
IEG HOLDINGS CORPORATION
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) FOR THE PERIOD
FROM JANUARY 1, 2013 THROUGH SEPTEMBER 30, 2014
(UNAUDITED)
Preferred Stock | Additional | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Series A | Series B | Series C |
Series D |
Paid-in | Subscription | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Receivable | Deficit | Total | |||||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2013 | 272,447,137 | $ | 272,447 | - | $ | - | - | $ | - | - | $ | - | - | $ | - | $ | 3,464,161 | $ | - | $ | (4,803,523 | ) | $ | (1,066,915 | ) | |||||||||||||||||||||||||||||||
Shares issued for pre-merger shares of shell | 7,484,650 | 7,485 | - | - | - | - | - | - | - | - | (7,485 | ) | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Issuance of shares at $0.02 and $0.03 | 12,491,916 | 12,492 | - | - | - | - | - | - | - | - | 287,265 | - | - | 299,757 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of shares at $0.005 | 664,299,127 | 664,299 | - | - | - | - | - | - | - | - | 2,579,378 | - | 3,243,677 | |||||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | - | - | - | - | (4,477,975 | ) | (4,477,975 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2013 | 956,722,830 | 956,723 | - | - | - | - | - | - | - | - | 6,323,319 | - | (9,281,498 | ) | (2,001,456 | ) | ||||||||||||||||||||||||||||||||||||||||
Issuance of shares at $0.005 | 611,991,383 | 611,991 | 2,447,966 | - | - | 3,059,957 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares at $0.01, $0.015 and $0.02 | 226,748,751 | 226,749 | 2,092,779 | - | - | 2,319,528 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Preferred Shares | - | - | 1,000,000 | 1,000 | - | - | - | - | - | - | 999,000 | - | - | 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of Preferred Shares | - | - | - | - | 410,000 | 410 | - | - | - | - | 409,590 | - | - | 410,000 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of Preferred Shares | - | - | - | - | - | - | 400,025 | 400 | - | - | 399,625 | - | - | 400,025 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of Preferred Shares | - | - | - | - | - | - | - | - | 173,000 | 173 | 172,827 | - | - | 173,000 | ||||||||||||||||||||||||||||||||||||||||||
Preferred Dividends | - | - | - | - | - | - | - | - | - | - | (101,532 | ) | - | - | (101,532 | ) | ||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | - | - | - | - | (4,308,962 | ) | (4,308,962 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2014 | 1,795,462,964 | $ | 1,795,463 | 1,000,000 | $ | 1,000 | 410,000 | $ | 410 | 400,025 | $ | 400 | 173,000 | $ | 173 | $ | 12,743,574 | $ | - | $ | (13,590,460 | ) | $ | 950,560 |
See the accompanying notes to consolidated financial statements.
F- 18 |
IEG HOLDINGS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013 (UNAUDITED)
September 30, 2014 | September 30, 2013 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (4,308,962 | ) | $ | (3,451,438 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Provision for credit losses | 344,558 | 31,786 | ||||||
Depreciation | 11,531 | 32,720 | ||||||
Amortization of loan costs | 40,267 | 35,631 | ||||||
Changes in assets - (increase) decrease: | ||||||||
Prepaid expenses | (70,570 | ) | - | |||||
Deposits | - | (4,875 | ) | |||||
Changes in liabilities - increase (decrease): | ||||||||
Accounts payable and accrued expenses | 74,898 | 5,652 | ||||||
Dividends payable | 51,011 | - | ||||||
Deferred salary | 1,225,000 | 716,543 | ||||||
Deferred rent | (7,132 | ) | - | |||||
Payable for Rights Sales Agreement | - | 1,500,000 | ||||||
NET CASH USED IN OPERATING ACTIVITIES | (2,639,399 | ) | (1,145,285 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Loans receivable originated | (2,587,016 | ) | (155,008 | ) | ||||
Loans receivable repaid | 177,864 | 29,659 | ||||||
Purchases of property and equipment | (2,646 | ) | - | |||||
Advances to IEG Holdings Limited ACN 131 987 838 | - | (621,279 | ) | |||||
Advances to officer | (427,196 | ) | (64,713 | ) | ||||
NET CASH USED IN INVESTING ACTIVITIES | (2,838,994 | ) | (811,341 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from long-term debt | 1,730,000 | 100,000 | ||||||
Proceeds from short-term loan | 640,000 | 400,000 | ||||||
Payments on short-term loan | (690,000 | ) | (220,000 | ) | ||||
Deposits on stock to be issued | 288,029 | 425,853 | ||||||
Proceeds from issuance of common stock | 4,455,650 | 1,206,751 | ||||||
Deposits on preferred stock | 1,170,061 | - | ||||||
Preferred dividends paid | (29,918 | ) | - | |||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 7,563,822 | 1,912,604 | ||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 2,085,429 | (44,022 | ) | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 281,879 | 178,601 | ||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 2,367,308 | $ | 134,579 | ||||
Supplemental disclosures: | ||||||||
Interest paid in cash | $ | 320,379 | $ | 108,095 | ||||
Income taxes paid in cash | $ | - | $ | - | ||||
Issuance of stock in lieu of payment of accrued compensation | $ | 975,484 | $ | 1,586,942 | ||||
Advance to IEG Holdings limited ACN 131 987 838 offset against payable for Rights Sales Agreement | $ | - | $ | 621,279 | ||||
Issuance of common stock in lieu of repayment of short term loan | $ | 90,000 | $ | - | ||||
Advance officer offset against accrued wages and accrued expenses | $ | 526,305 | $ | - |
See the accompanying notes to consolidated financial statements.
F- 19 |
IEG HOLDINGS CORPORATION
NOTES TO unaudited CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The principal business activity of the Company is providing unsecured consumer loans ranging from $2,000 - $10,000 over a five year term. The loans are offered under the consumer brand “Mr. Amazing Loans”. The Company is headquartered in Las Vegas, Nevada and originates direct consumer loans in the states of Nevada, Florida, Illinois, Arizona, Missouri, Georgia, Virginia and New Jersey via its online platform and distribution network. The Company is a fully licensed consumer installment loan provider in these 8 states and offers all loans within the prevailing statutory rates.
Organization and Basis of Accounting
Investment Evolution Global Corporation (“IEGC”) was incorporated in the state of Delaware on February 20, 2008. On March 14, 2013, IEGC consummated a reverse merger transaction with IEG Holdings Corporation (“IEG Holdings”) (f/k/a Ideal Accents, Inc.). As a result of the reverse merger, the shareholders of IEGC received 90,815.71 shares of common stock in IEG Holdings for each share of IEGC, so that they own approximately 99.1% of the issued and outstanding common shares of IEG Holdings immediately after the transaction. For accounting purposes, the reverse merger has been treated as an acquisition of IEG Holdings by IEGC (the accounting acquirer) and a recapitalization of IEGC. Immediately prior to the reverse merger, IEG Holdings effected a 1-for-6 reverse stock split. The stockholders’ equity has been restated to retroactively reflect the number of shares of IEGC, using the capital structure of IEG Holdings and to present the accumulated deficit of IEGC as of the date of the merger.
These consolidated financial statements include the operations of IEG Holdings Corporation and its wholly-owned subsidiaries Investment Evolution Global Corporation, Investment Evolution Corporation, and IEC SPV, LLC (collectively the “Company”). All inter-company transactions and balances have been eliminated in consolidation.
We have prepared the Company’s accompanying consolidated unaudited financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial statements and with instructions to annual statements pursuant to the rules and regulations of Securities and Exchange Act of 1934, as amended, or the Exchange Act and Article 8-03 of Regulation S-X promulgated under the Exchange Act. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, we have included all adjustments considered necessary (consisting of normal recurring adjustments) for a fair presentation. Operating results for the nine months ended September 30, 2014 and 2013 are not indicative of the results that may be expected for the fiscal year ending December 31, 2014. You should read these unaudited consolidated financial statements in conjunction with the audited financial statements for the year ended December 31, 2013 and the notes thereto. The Company’s accounting and reporting policies are in accordance with U.S. generally accepted accounting principles and conform to general practices within the consumer finance industry.
Going Concern
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has reported recurring losses and has generated negative net cash flows from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management intends to raise capital funding sufficient to continue operations through January 2016 via a private or public offering of equity. This additional working capital will enable the Company to increase loan volume utilizing its existing $10 million credit facility. If the Company is not successful in raising sufficient capital, it may have to delay or reduce expenses, or curtail operations. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that could result should the Company not continue as a going concern.
F- 20 |
IEG HOLDINGS CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures. Management uses its historical records and knowledge of its business in making these estimates. Accordingly, actual results may differ from these estimates.
Cash and Cash Equivalents
For the purpose of the statement of cash flows, the Company considers cash equivalents to include short-term, highly liquid investments with an original maturity of three months or less.
Loans Receivable and Interest Income
The Company is licensed to originate consumer loans in the states of Nevada, Florida, Illinois, Arizona, Missouri, Georgia, Virginia and New Jersey. During the nine months ended September 30, 2014 and 2013, the Company originated $2,000, $3,000, $5,000 and $10,000 loans with terms ranging from three to five years. The Company offers its loans at or below the prevailing statutory rates. Loans are carried at the unpaid principal amount outstanding, net of an allowance for credit losses.
The Company calculates interest revenue using the interest yield method. Charges for late payments are credited to income when collected. Application fees are insignificant.
Accrual of interest income on loans receivable is suspended when no payment has been received on account for 60 days or more on a contractual basis, at which time a loan is considered delinquent. Loans are returned to active status and accrual of interest income is resumed when all of the principal and interest amounts contractually due are brought current; at which time management believes future payments are reasonably assured. At September 30, 2014, 21 loans with a balance of $75,254 were delinquent.
Allowance for Credit Losses
The Company maintains an allowance for credit losses due to the fact that it is probable that a portion of the loans receivable will not be collected. The allowance is estimated by management based on various factors, including specific circumstances of the individual loans, management’s knowledge of the industry, and the experience and trends of other companies in the same industry.
Impaired Loans
The Company defines impaired loans as bankrupt accounts and accounts that are 184 days or more past due. In accordance with the Company’s charge-off policy, once a loan is deemed uncollectible, 100% of the remaining balance is charged-off. Loans can also be charged off when deemed uncollectable due to consumer specific circumstances.
Property and Equipment
Property and equipment are stated at cost. Depreciation and amortization are being provided using the straight-line method over the estimated useful lives of the assets as follows:
Classification
Life |
||
Computer equipment | 3-5 years | |
Furniture and fixtures | 8 years |
F- 21 |
IEG HOLDINGS CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property and Equipment (Continued)
The Company amortizes its leasehold improvements over the shorter of their economic lives, which are generally five years, or the lease term that considers renewal periods that are reasonably assured. Expenses for repairs and maintenance are charged to expense as incurred, while renewals and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statement of operations.
Operating Leases
The Company’s office leases typically have a lease term of three to five years and contain lessee renewal options and cancellation clauses in the event of regulatory changes.
Loan Costs
Loan costs relate to the $10 million credit facility, and include broker success fees and legal fees. These costs are amortized over four years, the period of the credit facility. Accumulated amortization of loan costs amounted to $114,281 and $74,015 at September, 2014 and December 31, 2013, respectively.
Income Taxes
We account for income taxes using the liability method in accordance with FASB Accounting Standards Codification (“ASC”) 740 “Income Taxes”. To date, no current income tax liability has been recorded due to our accumulated net losses. Deferred income tax assets and liabilities are recognized for temporary differences between the financial statement carrying amounts of assets and liabilities and the amounts that are reported in the income tax returns. Our net deferred income tax assets have been fully reserved by a valuation allowance due to the uncertainty of our ability to realize future taxable income and to recover our net deferred income tax assets.
Advertising Costs
Advertising costs are expensed as incurred and are included in general administrative expenses. Advertising costs amounted to $207,814 and $56,264 for the nine months ended September 30, 2014 and 2013, respectively.
Earnings and loss per Share
The Company computes net earnings (loss) per share in accordance with ASC 260-10 that establishes standards for computing and presenting net earnings (loss) per shares. Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares, if any, had been issued and if the additional common shares were dilutive.
Fair Value of Financial Instruments
The Company has adopted guidance issued by the FASB that defines fair value, establishes a framework for measuring fair value in accordance with existing generally accepted accounting principles, and expands disclosures about fair value measurements. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The categories are as follows:
F- 22 |
IEG HOLDINGS CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fair Value of Financial Instruments (Continued)
Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date.
At September 30, 2014 and December 31, 2013, the only financial instruments that are subject to these classifications are cash and cash equivalents, which are considered Level I assets.
Carrying amounts reported in the consolidated balance sheets for accounts payable and accrued expenses approximate fair value because of their immediate or short-term nature. The fair value of borrowings is not considered to be significantly different than its carrying amount because the stated rates for such debt reflect current market rates and conditions.
Recently Issued or Newly Adopted Accounting Standards
In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, which eliminates diversity in practice for the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward is available to reduce the taxable income or tax payable that would result from disallowance of a tax position. ASU 2013-11 affects only the presentation of such amounts in an entity’s balance sheet and is effective for fiscal years beginning after December 15, 2013 and interim periods within those years. Early adoption is permitted. We are evaluating the impact, if any, of the adoption of ASU 2013-11 on our balance sheet.
In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The standard will eliminate the transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. The revenue recognition standard is required to be applied retrospectively, including any combination of practical expedients as allowed in the standard. We are evaluating the impact, if any, of the adoption of ASU 2014-09 to our financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.
F- 23 |
IEG HOLDINGS CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In August 2014, the FASB issued FASB ASU2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. FASB ASU 2014-15 changes to the disclosure of uncertainties about an entity’s ability to continue as a going concern. Under GAAP, continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Even if an entity’s liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. Because there is no guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related note disclosures, there is diversity in practice whether, when, and how an entity discloses the relevant conditions and events in its financial statements. As a result, these changes require an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that financial statements are issued. Substantial doubt is defined as an indication that it is probable that an entity will be unable to meet its obligations as they become due within one year after the date that financial statements are issued. If management has concluded that substantial doubt exists, then the following disclosures should be made in the financial statements:
(i) principal conditions or events that raised the substantial doubt, (ii) management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations, (iii) management’s plans that alleviated the initial substantial doubt or, if substantial doubt was not alleviated, management’s plans that are intended to at least mitigate the conditions or events that raise substantial doubt, and (iv) if the latter in (iii) is disclosed, an explicit statement that there is substantial doubt about the entity’s ability to continue as a going concern. These changes become effective for the Company for the 2016 annual period. Management has determined that the adoption of these changes will not have an impact on the Consolidated Financial Statements. Subsequent to adoption, this guidance will need to be applied by management at the end of each annual period and interim period therein to determine what, if any, impact there will be on the Consolidated Financial Statements in a given reporting period.
2. LOANS RECEIVABLE
Loans receivable consisted of the following at September 30, 2014 and December 31, 2013:
September 30, 2014 | December 31, 2013 | |||||||
Loans receivable | $ | 2,849,114 | $ | 487,432 | ||||
Allowance for credit losses | (358,419 | ) | (61,319 | ) | ||||
Loans receivable, net | 2,490,695 | 426,113 | ||||||
Loan receivables, current, net | 373,604 | 64,719 | ||||||
Loan receivables, non current, net | $ | 2,117,091 | $ | 361,394 |
A reconciliation of the allowance for credit losses consist of the following at September 30, 2014 and December 31, 2013:
September 30, 2014 | December 31, 2013 | |||||||
Beginning balance | $ | 61,319 | $ | 17,777 | ||||
Provision for credit losses | 344,558 | 63,492 | ||||||
Loans charged off | (47,458 | ) | (19,950 | ) | ||||
Ending balance | $ | 358,419 | $ | 61,319 |
3. PROPERTY AND EQUIPMENT
At September 30, 2014 and December 31, 2013, property and equipment consists of the following:
September 30, 2014 | December 31, 2013 | |||||||
Computer equipment | $ | 120,513 | $ | 120,513 | ||||
Furniture and fixtures | 15,961 | 13,314 | ||||||
Leasehold improvements | 57,980 | 57,980 | ||||||
194,454 | 191,807 | |||||||
Less accumulated depreciation and amortization | 159,989 | 148,458 | ||||||
Total | $ | 34,465 | $ | 43,349 |
F- 24 |
IEG HOLDINGS CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
3. PROPERTY AND EQUIPMENT (Continued)
Depreciation of property and equipment amounted to $11,531 and $32,720 during the nine months ended September 30, 2014 and 2013, respectively, are included in the accompanying statements of operations in operating expenses.
4. LONG TERM DEBT
The Company has a credit facility that provides for borrowings of up to $10 million with $2,230,000 and $500,000 outstanding at September 30, 2014 and December 31, 2013, respectively, subject to a borrowing base formula. The Company may borrow, at its option, at the rate of 18% with a minimum advance of $25,000. As of September 30, 2014 the Company’s effective interest rate was 18% and the unused amount available under the credit line was $7.77 million. Proceeds from this credit facility are used to fund loans to consumers. The credit facility revolving period, during which interest only payments are due, was extended on June 30, 2014 under an amendment to the loan agreement. Upon conversion to a term loan, monthly principal and interest payments equal to 100% of the consumer loan proceeds will be due. This note matures on June 1, 2016.
Substantially all of the Company’s assets are pledged as collateral for borrowings under the revolving credit agreement.
Future minimum payments on the credit facility at September 30, 2014 are as follows:
Twelve months ending | ||||
September 30, | ||||
2015 | $ | - | ||
2016 | 2,230,000 | |||
$ | 2,230,000 |
5. WORKING CAPITAL LOANS
On April 28, 2014, the Company secured a loan up to $245,000 from Dr. L. Prasad, an investor in the Company. The Company repaid $109,500 on May 1, 2014 which comprised full repayment of $85,000 loan principal advanced and a $24,500 facility fee recorded as interest expense.
On April 28, 2014, the Company secured a $265,000 loan from Willoughby Family Trust, an investor in the Company. The Company repaid $310,000 on June 30, 2014 which comprised full repayment of $265,000 loan principal and a $45,000 facility fee recorded as interest expense.
On July 13, 2014, the Company secured a $100,000 working capital loan to expand from Dr. L Prasad, an investor in the Company. The Company repaid $115,000 on September 30, 2014 which comprised full repayment of $100,000 loan principal and a $15,000 facility fee recorded as interest expense.
On July 14, 2014, the Company secured a $90,000 working capital loan to expand from Willoughby Family Trust, an investor in the Company. The Company repaid $99,000 ($90,000 in stock and $9,000 in cash) by September 8, 2014 which comprised full repayment of $90,000 loan principal and a $9,000 facility fee recorded as interest expense.
On July 28, 2014, the Company secured a $100,000 working capital loan to expand from Domenic Tacca, an investor in the Company. The Company repaid $115,000 on September 30, 2014 which comprised full repayment of $100,000 loan principal and a $15,000 facility fee recorded as interest expense.
F- 25 |
IEG HOLDINGS CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
6. STOCKHOLDERS’ EQUITY
The aggregate number of shares which the Company has the authority to issue is 2,550,000,000 shares, of which 2,500,000,000 shares are common stock, par value $0.001 per share, and 50,000,000 shares are preferred stock, par value $0.001 per share. The Board of Directors is authorized at any time, and from time to time, to provide for the issuance of Preferred Stock in one or more series, and to determine the designations, preferences, limitations and relative or other rights of the Preferred Stock or any series thereof.
The stockholders’ equity has been restated to retroactively reflect the number of shares of Investment Evolution Global Corporation, using the capital structure of IEG Holdings Corporation and to present the accumulated deficit of Investment Evolution Global Corporation as of the date of the merger.
During the nine months ended September 30, 2014 and 2013, the Company issued 838,740,134 shares of common stock at a price of $0.005, $0.01, $0.015 and $0.02 per share and 12,491,916 shares at a price of $0.02 and $0.03 per share, respectively, in accordance with rights offerings to existing stockholders of the Company.
On March 31, 2014 the Board of Directors resolved to increase the authorized number of common stock from 1,000,000,000 to 2,500,000,000. In addition, the Board of Directors authorized to issue Series A, B, C and D of Preferred Stock, par value $0.001 per share.
On March 31, 2014 the Company issued 1,983,025 shares of convertible preferred stock (“Preferred Stock”), which is allocated as follows: Series A: 1,000,000 shares, Series B: 410,000 shares, Series C: 400,025 shares and Series D: 173,000 shares.
On March 31, 2014 the Company authorized the issuance of 1,000,000 unregistered shares of its Series A Preferred Stock to the Company’s President and Chief Executive Officer, Mr. Paul Mathieson, in consideration for $1,000,000.
The Preferred Stock accrues dividends at the rate of 12% per annum paid monthly. Each series of preferred stock ranks pari-passu with each other series of preferred stock, and senior to the common stock of the Company, as to dividends, and upon liquidation, dissolution or a winding up of the Company. In the event of a liquidation or winding up of the Corporation, holders of the Preferred Stock shall be entitled to receive the Stated Value of $1 per share.
Series A Preferred Stock
During the nine months ended September 30, 2014 and 2013, the Company issued 1,000,000 and 0 shares of Series A convertible preferred stock, respectively, with a par value of $0.001 per share. Each share is convertible into 400 shares of common stock at the option of the holder any time after December 31, 2014. The holder of the shares is also entitled to vote at a ratio of 1001 votes for each share of preferred stock.
Series B Preferred Stock
During the nine months ended September 30, 2014 and 2013, the Company issued 410,000 and 0 shares of Series B convertible preferred stock, respectively, with a par value of $0.001 per share. Each share is convertible into 400 shares of common stock at the option of the holder on December 31, 2014; or if the holder elects to convert on December 31, 2015, each share is convertible into 66 2/3 shares of common stock. The holder of the shares is also entitled to vote at a ratio of 200 votes for each shares of preferred stock. Any time after December 31, 2015, the Company also has the right to redeem the shares at a redemption value of $1 per share.
Series C Preferred Stock
During the nine months ended September 30, 2014 and 2013, the Company issued 400,025 and 0 shares of Series C convertible preferred stock, respectively, with a par value of $0.001 per share. Each share is convertible into 200 shares of common stock at the option of the holder on December 31, 2014; or if the holder elects to convert on December 31, 2015, each share is convertible into 57.1428 shares of common stock. The holder of the shares is also entitled to vote at a ratio of 100 votes for each shares of preferred stock. Any time after December 31, 2015, the Company also has the right to redeem the shares at a redemption value of $1 per share.
F- 26 |
IEG HOLDINGS CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
6. STOCKHOLDERS’ EQUITY (Continued)
Series D Preferred Stock
During the nine months ended September 30, 2014 and 2013, the Company issued 173,000 and 0 shares of Series D convertible preferred stock, respectively, with a par value of $0.001 per share. Each share is convertible into 133.3333 shares of common stock at the option of the holder on December 31, 2014; or if the holder elects to convert on December 31, 2015, each share is convertible into 50 shares of common stock. The holder of the shares is also entitled to vote at a ratio of 67 votes for each shares of preferred stock. Any time after December 31, 2015, the Company also has the right to redeem the shares at a redemption value of $1 per share.
On September 25, 2014 the Board of Directors resolved to issue Series E and F of Preferred Stock, par value $0.001 per share.
7. INCOME TAXES
The difference between income tax expense attributable to continuing operations and the amount of income tax expense that would result from applying domestic federal statutory rates to pre-tax income (loss) is mainly related to an increase in the valuation allowance. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. Deferred income tax assets are mainly related to net operating loss carryforwards. Management has chosen to take a 100% valuation allowance against the deferred income tax asset until such time as management believes that its projections of future profits make the realization of the deferred income tax assets more likely than not. Significant judgment is required in the evaluation of deferred income tax benefits and differences in future results from management’s estimates could result in material differences.
As of September 30, 2014, the Company is in the process of determining the amount of loss carryforwards that may potentially be used to offset future Federal taxable income, which will expire through 2033. In the event of statutory ownership changes, the amount of net operating loss carryforwards that may be utilized in future years is subject to significant limitations.
The Company has adopted guidance issued by the FASB that clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold of more likely than not and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities. The Company’s policy is to include interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties totaled $0 for the nine months ended September 30, 2014 and 2013. The Company files income tax returns with the Internal Revenue Service (“IRS”) and the states of Nevada, Florida, Illinois and Arizona. All of the Company’s tax filings are still subject to examination. The Company's net operating loss carryforwards are subject to IRS examination until they are fully utilized and such tax years are closed.
8. CONCENTRATION OF CREDIT RISK
The Company’s portfolio of finance receivables is with consumers living throughout Nevada, Florida, Illinois, Arizona, Missouri, Georgia, Virginia and New Jersey and consequently such consumers’ ability to honor their installment contracts may be affected by economic conditions in these areas.
The Company maintains cash at financial institutions which may, at times, exceed federally insured limits.
F- 27 |
IEG HOLDINGS CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
9. COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company leases its operating facilities under non-cancelable operating leases that expire through August 2016. Total rent expense for the nine months ended September 30, 2014 and 2013 was $192,189 and $208,412 respectively. The Company is responsible for certain operating expenses in connection with these leases. The following is a schedule, by year, of future minimum rental payments required under non-cancelable operating leases in excess of one year as of September 30, 2014:
Twelve months ending
September 30, |
||||
2015 | $ | 192,163 | ||
2016 | $ | 118,717 |
The Chicago, Phoenix and West Palm Beach offices were vacated in 2013 after obtaining special approval from the Illinois, Arizona and Florida Commissioners to operate the state licenses without having a physical office location in each state. The Company subleased the Chicago office in September 2014 and is currently looking to sublease the remaining two unused offices which could reduce future required rental payments.
Legal Matters
From time to time, the Company may get involved in legal proceedings in the normal course of its business. The Company is not involved in any legal proceedings at the present time.
Professional Employment Contract
The Company has a professional employment contract with its Chief Executive Officer (“CEO”), according to which, the Company paid $225,000 salary plus health insurance and $1,000,000 bonus ($975,484 of $1,000,000 bonus was issued in common stock) for the nine months ended September 30, 2014. Commencing October 1, 2014 the Company is obligated to pay its CEO $1,000,000 salary annually plus health insurance, with a discretionary bonus to be determined by the IEG Holdings Corporation Board on December 31, 2015.
Regulatory Requirements
State statutes authorizing the Company’s products and services typically provide state agencies that regulate banks and financial institutions with significant regulatory powers to administer and enforce the law. Under statutory authority, state regulators have broad discretionary power and may impose new licensing requirements, interpret or enforce existing regulatory requirements in different ways, or issue new administrative rules. In addition, when the staff of state regulatory bodies change, it is possible that the interpretations of applicable laws and regulations may also change.
10. RELATED PARTIES TRANSACTIONS
Deferred salary and bonus to our Chief Executive Officer totaling $975,484 was offset against issuance of shares of common stock during the nine months ended September 30, 2014. Advance to officer was also offset against wages and accrued expenses paid on behalf of the company for a total of $526,305.
Effective June 30, 2013, the Company entered into a Rights Sales Agreement, under which the Company acquired the Australian rights to conduct business throughout Australia, from IEG Holdings Limited ACN 131 987 838, its parent (until its shares were distributed to the ultimate shareholders of IEG Holdings Limited ACN 131 987 838).
The purchase price for the Rights Sales Agreement was $1,500,000 which was paid as follows:
Paid through advances to (payments to third parties made on behalf of) IEG Holdings Limited ACN 131 987 838 | $ | 1,074,937 | ||
Offset amounts owed from Company shareholders who are also creditors of IEG Holdings Limited ACN 131 987 838 | $ | 425,063 |
The cost of the Rights Sales Agreement was recorded as start-up costs in the statements of operations in accordance with ASC 720-15-25.
F- 28 |
IEG HOLDINGS CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
11. REVERSE MERGER
On January 25, 2013 the Investment Evolution Global Corporation (“IEGC”) entered into a stock exchange agreement (the “Stock Exchange Agreement”) among IEGC, its sole shareholder IEG Holdings Limited, an Australian company (“IEG”) and IEG Holdings Corporation (f/k/a Ideal Accents, Inc.), a Florida corporation (“IEG Holdings”). Under the terms of the Stock Exchange Agreement, IEG Holdings agreed to acquire a 100% interest in the Company for 272,447,137 shares of IEG Holdings’ common stock after giving effect to a 1 for 6 reverse stock split. On February 14, 2013 IEG Holdings filed the Amended Articles with the Secretary of State of Florida changing its name from Ideal Accents, Inc. to IEG Holdings Corporation, increasing the number of shares of its authorized common stock to 1,000,000,000, $.001 par value, creation of 50,000,000 shares of “blank-check” preferred stock and effectuating a 1 for 6 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”) pursuant to the terms of the Stock Exchange Agreement. FINRA approved the IEG Holdings Amended Articles on March 11, 2013.
On March 13, 2013 IEG Holdings completed the acquisition of IEGC under the terms of the Stock Exchange Agreement and issued to IEG 272,447,137 shares of IEG Holdings common stock after giving effect to the Reverse Stock Split whereby IEG Holdings acquired a 100% interest in the Company. As a result of the ownership interests of IEG in IEG Holdings and its former ownership interest in the Company, for financial statement reporting purposes, the acquisition of the Company by IEG Holdings has been treated as a reverse acquisition with the Company being the accounting acquirer.
12. SUBSEQUENT EVENTS
Common Stock Issuance
On November 19, 2014 the Company issued 75,316,666 shares of common stock at a price of $0.01, $0.015 and $0.02 per share in accordance with an entitlement offering to existing stockholders of the Company.
On November 27, 2014 the Company issued 1,819,032 shares of common stock at a price of $0.01 per share in accordance with an entitlement offering to existing stockholders of the Company.
Preferred Stock Issuance
On November 19, 2014 the Company issued 1,861,000 shares of convertible preferred stock (“Preferred Stock”) which is allocated as follows: Series E: 461,000 shares, Series F: 1,400,000 shares.
Series E Preferred Stock
On November 19, 2014 the Company issued 461,000 shares of Series E convertible preferred stock, with a par value of $0.001 per share. Each share is convertible into 40 shares of common stock at the option of the holder on December 31, 2014; or if the holder elects to convert on December 31, 2015, each share is convertible into 25 shares of common stock. The holder of the shares is also entitled to vote at a ratio of 40 votes for each shares of preferred stock. Any time after December 31, 2015, the Company also has the right to redeem the shares at a redemption value of $1 per share.
Series F Preferred Stock
On November 19, 2014 the Company issued 1,400,000 shares of Series F convertible preferred stock, with a par value of $0.001 per share. Each share is convertible into 33.3333 shares of common stock at the option of the holder on December 31, 2015. The holder of the shares is also entitled to vote at a ratio of 34 votes for each shares of preferred stock. Any time after December 31, 2015, the Company also has the right to redeem the shares at a redemption value of $1 per share.
Texas Lending License
On November 14, 2014 the Company was issued a lending license for the state of Texas and plans to commence lending to residents of Texas in November 2014.
F- 29 |
IEG HOLDINGS CORPORATION
172,965,945 Shares of
Common Stock
PROSPECTUS
____________, 2014
Until ____________, 2014, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
83 |
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The table below lists various expenses payable in connection with the sale and distribution of the securities being registered hereby. All the expenses are estimates, except the Securities and Exchange Commission (“SEC”) registration fee. All such expenses will be borne by the Company; none of the expenses will be borne by the selling stockholders.
Type | Amount | |||
SEC Registration Fee | $ | 20,099 | ||
Legal Fees and Expenses | 25,000 | |||
Accounting Fees and Expenses | 5,000 | |||
Total Expenses | $ | 50,099 |
Item 14. Indemnification of Directors and Officers
The Florida Business Corporation Act allows us to indemnify any person made a party to any lawsuit by reason of being a director or officer of the Company, or serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Our Amended and Restated Articles of Incorporation provide that our directors and officers shall be indemnified and the Company shall advance expenses on behalf of its officers and directors to the fullest extent not prohibited by law either now or hereafter.
Our by-laws require us to indemnify directors and officers against, to the fullest extent permitted by law, liabilities which they may incur under the circumstances described above.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Item 15. Recent Sales of Unregistered Securities
The following is a summary of transactions by us within the past three years involving sales or our securities that were not registered under the Securities Act. All numbers of shares and exercise prices have been adjusted to reflect the 1-for-6 reverse split of the company effected on April 15, 2011.
Pursuant to the terms of the January 25, 2013 stock exchange agreement (the “Stock Exchange Agreement”) among Investment Evolution Global Corporation (“IEGC”), its sole shareholder IEG Holdings Limited, an Australian company (“IEG”) and our Company, we issued 272,447,137 shares of our common stock in exchange for a 100% interest in IEGC in March 2013. The securities were issued in reliance upon the exemptions provided by Section 4(a)(2), Regulation S and Section 2(a)(3), as applicable under the Securities Act of 1933, as amended (the “Securities Act”). Such securities are restricted as to their transferability as set forth in Rule 144 under the Securities Act.
During the nine months ended September 30, 2013, we issued 12,491,916 shares of our common stock at a price of $0.02 and $0.03 per share, and 512,513,594 shares at $0.005 per share in accordance with a rights offering to pre-merger existing stockholders of the Company. The securities were issued in reliance upon the exemptions provided by Section 4(a)(2), Regulation S and Section 2(a)(3), as applicable under the Securities Act. Such securities are restricted as to their transferability as set forth in Rule 144 under the Securities Act.
During the quarter ended December 31, 2013, the Company issued 151,785,533 shares at a price of $0.005 per share in accordance with a rights offering to the pre-merger existing stockholders of the Company. The securities were issued in reliance upon the exemptions provided by Section 4(a)(2) and Section 2(a)(3), as applicable under the Securities Act.
On March 31, 2014, the Company issued 1,000,000 shares of Series A convertible preferred stock to the Company’s President and Chief Executive Officer, Mr. Paul Mathieson, in consideration for $1,000,000. Also on March 31, 2014, the Company issued an aggregate of 410,000 shares of Series B convertible preferred stock to four accredited investors, for an aggregate purchase price of $410,000. In addition, on March 31, 2014, the Company issued an aggregate of 400,025 shares of Series C convertible preferred stock to five accredited investors, for an aggregate purchase price of $400,025. The Company also issued an aggregate of 173,000 shares of Series D convertible preferred stock to 14 accredited investors on March 31, 2014, for an aggregate purchase price of $173,000. All of these securities were issued in reliance upon the exemptions provided by Section 4(a)(2) and Section 2(a)(3), as applicable, and Regulation S under the Securities Act.
During the quarter ended June 30, 2014, the Company issued 611,991,383 shares of its common stock at a price of $0.005 per share in accordance with rights offerings to existing stockholders of the Company. The securities were issued in reliance upon the exemptions provided by Section 4(a)(2) and Section 2(a)(3), as applicable under the Securities Act.
II- 1 |
During the nine months ended September 30, 2014, the Company issued 838,740,134 shares of common stock at a price of $0.005, $0.01, $0.015 and $0.02 per share, in accordance with rights offerings to existing stockholders of the Company. The securities were issued in reliance upon the exemptions from registration provided by Regulation D, Rule 506 and Rule 506(b) and Regulation S as promulgated by the SEC under the Securities Act.
On November 19, 2014, the Company issued 75,316,666 shares of common stock at a price of $0.01, $0.015 and $0.02 per share in accordance with an entitlement offering to existing stockholders of the Company. These securities were issued in reliance upon the exemptions provided by Section 4(a)(2) and Section 2(a)(3), as applicable under the Securities Act.
On November 19, 2014 the Company issued an aggregate of 461,000 shares of Series E preferred stock to nine accredited investors. Also on November 19, 2014, the Company issued an aggregate of 1,400,000 shares of Series F preferred stock 24 accredited investors. All of these securities were issued in reliance upon the exemptions provided by Section 4(a)(2) and Section 2(a)(3), as applicable under the Securities Act.
On November 27, 2014 the Company issued 1,819,032 shares of common stock at a price of $0.01 per share in accordance with an entitlement offering to existing stockholders of the Company. All of these securities were issued in reliance upon the exemptions provided by section 4(a)(2), as applicable under the Securities Act.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits.
See the Exhibit Index on the page immediately preceding the exhibits for a list of exhibits filed as part of this registration statement on Form S-1, which Exhibit Index is incorporated herein by reference.
(b) Financial Statement Schedules.
None.
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities Act “”may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
(a) Rule 415 Offering. The undersigned registrant hereby undertakes:
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: | ||
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; | ||
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement. | ||
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; | ||
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | ||
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Las Vegas, State of Nevada, on December 12, 2014.
IEG Holdings Corporation | ||
By: | /s/ Paul Mathieson | |
Paul Mathieson, | ||
President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this Form S-1 has been signed by the following persons in the capacities indicated on December 12, 2014.
Name | Title | |
/s/ Paul Mathieson | President, Chief Executive Officer, Chief Financial Officer | |
Paul Mathieson | (Principal Executive Officer and Principal Financial and Accounting Officer) and Sole Director |
EXHIBIT INDEX
Exhibit Number | Description of Exhibit | |
2.1* | Stock Exchange Agreement among Investment Evolution Global Corporation, IEG Holdings Limited and Ideal Accents, Inc. dated as of January 28, 2013. | |
3.1* | Amended and Restated Articles of Incorporation of IEG Holdings Corporation, effective February 22, 2013. | |
3.2* | Articles of Amendment to Amended and Restated Articles of Incorporation of IEG Holdings Corporation, effective March 20, 2014. | |
3.3* | Articles of Amendment to Amended and Restated Articles of Incorporation of IEG Holdings Corporation, effective October 27, 2014. | |
3.4* | Amended and Restated Bylaws adopted on August 16, 2013. | |
4.1* | Form of Stock Certificate. | |
5.1* | Form of Opinion of the Law Office of Legal & Compliance, LLC. | |
10.1* | Loan and Security Agreement between IEC SPV, LLC and BFG Loan Holdings, LLC dated June 11, 2012. | |
10.2* | Promissory Note by IEC SPV, LLC in favor of BFG Loan Holdings, LLC dated June 11, 2012. | |
10.3* | Amended and Restated Promissory Note by IEC SPV, LLC in favor of BFG Loan Holdings, LLC dated as of November 12, 2013. | |
10.4* | First Amendment to Loan and Security Agreement between IEC SPV, LLC and BFG Loan Holdings, LLC dated November 12, 2013. | |
10.5* | Second Amendment to Loan and Security Agreement by and between BFG Investment Holdings, LLC, IEC SPV, LLC, Investment Evolution Global Corporation, Investment Evolution Corporation and Paul J. Mathieson dated as of June 30, 2014. | |
21.1* | List of Subsidiaries. | |
23.1* | Consent of Independent Registered Public Accounting Firm. | |
23.2* | Consent of the Law Office of Legal & Compliance, LLC (included in Exhibit 5.1). |
* Filed herewith.
SHARE EXCHANGE AGREEMENT
by and among
IDEAL ACCENTS, INC.
a Florida Corporation
and
INVESTMENT EVOLUTION GLOBAL CORPORATION,
A Delaware corporation
and
IEG HOLDINGS LIMITED
an Australian company
Dated as of January 28, 2013
TABLE OF CONTENTS
PAGE | ||||
ARTICLE I REPRESENTATIONS, COVENANTS, AND WARRANTIES OF IEG US | 1 | |||
Section 1.01 | Incorporation | 1 | ||
Section 1.02 | Authorized Shares and Capital | 2 | ||
Section 1.03 | Subsidiaries and Predecessor Corporations | 2 | ||
Section 1.04 | Financial Statements | 2 | ||
Section 1.05 | Information | 3 | ||
Section 1.06 | Options or Warrants | 3 | ||
Section 1.07 | Absence of Certain Changes or Events | 3 | ||
Section 1.08 | Litigation and Proceedings | 3 | ||
Section 1.09 | Contracts | 4 | ||
Section 1.10 | Compliance With Laws and Regulations | 4 | ||
Section 1.11 | Approval of Agreement | 4 | ||
Section 1.12 | IEG US Schedules | 4 | ||
Section 1.13 | Valid Obligation | 5 | ||
ARTICLE II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF IACE | 5 | |||
Section 2.01 | Organization | 5 | ||
Section 2.02 | Capitalization | 5 | ||
Section 2.03 | Subsidiaries and Predecessor Corporations | 5 | ||
Section 2.04 | INTENTIONALLY OMITTED | 5 | ||
Section 2.05 | Information | 5 | ||
Section 2.06 | Options or Warrants | 6 | ||
Section 2.07 | Absence of Certain Changes or Events | 6 | ||
Section 2.08 | Litigation and Proceedings | 7 | ||
Section 2.09 | Contracts | 7 | ||
Section 2.10 | No Conflict With Other Instruments | 7 | ||
Section 2.11 | Compliance With Laws and Regulations | 7 | ||
Section 2.12 | Approval of Agreement | 7 | ||
Section 2.13 | Material Transactions or Affiliations | 7 | ||
Section 2.14 | IACE Schedules | 8 | ||
Section 2.15 | Bank Accounts; Power of Attorney | 8 | ||
Section 2.16 | Valid Obligation | 8 | ||
Section 2.17 | SEC Filings | 8 | ||
Section 2.18 | OTC Marketplace Quotation | 8 | ||
ARTICLE III SHARE EXCHANGE | 9 | |||
Section 3.01 | The Exchange | 9 | ||
Section 3.02 | Closing | 9 | ||
Section 3.03 | Closing Events | 9 | ||
Section 3.04 | Termination | 9 | ||
ARTICLE IV SPECIAL COVENANTS | 9 | |||
Section 4.01 | Access to Properties and Records | 9 | ||
Section 4.02 | Delivery of Books and Records | 10 | ||
Section 4.03 | Third Party Consents and Certificates | 10 |
Section 4.04 | IACE SEC Filings | 10 | ||
Section 4.05 | Designation of Directors and Officer | 10 | ||
Section 4.06 | Actions Prior to Closing | 10 | ||
Section 4.07 | Indemnification | 11 | ||
Section 4.08 | The Acquisition of IACE Common Stock | 12 | ||
ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF IACE | 12 | |||
Section 5.01 | Accuracy of Representations and Performance of Covenants | 12 | ||
Section 5.02 | Officer’s Certificate | 12 | ||
Section 5.03 | Approval by IEGH | 13 | ||
Section 5.04 | No Governmental Prohibition | 13 | ||
Section 5.05 | Consents | 13 | ||
Section 5.06 | Other Items. | 13 | ||
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF IEG US AND IEGH | 13 | |||
Section 6.01 | Accuracy of Representations and Performance of Covenants | 13 | ||
Section 6.02 | Officer’s Certificate | 13 | ||
Section 6.03 | Good Standing | 13 | ||
Section 6.04 | No Governmental Prohibition | 14 | ||
Section 6.05 | Approval by IACE Board of Directors | 14 | ||
Section 6.06 | Consents | 14 | ||
Section 6.07 | Shareholder Report | 14 | ||
Section 6.08 | Other Items | 14 | ||
ARTICLE VII MISCELLANEOUS | 14 | |||
Section 7.01 | Brokers | 14 | ||
Section 7.02 | Governing Law | 15 | ||
Section 7.03 | Notices | 15 | ||
Section 7.04 | Attorney’s Fees | 15 | ||
Section 7.05 | Confidentiality | 15 | ||
Section 7.06 | Public Announcements and Filings | 16 | ||
Section 7.07 | Schedules; Knowledge | 16 | ||
Section 7.08 | Third Party Beneficiaries | 16 | ||
Section 7.09 | Expenses | 16 | ||
Section 7.10 | Entire Agreement | 16 | ||
Section 7.11 | Survival; Termination | 16 | ||
Section 7.12 | Counterparts | 16 | ||
Section 7.13 | Amendment or Waiver | 16 | ||
Section 7.14 | Best Efforts |
Exhibits
Exhibit A - Suitability Letter
Exhibit B - Investment Representation Letter
Exhibit C - Form of IACE Amended and Restated Articles of Incorporation
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (hereinafter referred to as this “Agreement”) is entered into as of this 28th day of January 2013, by and between IDEAL ACCENTS, INC., a Florida corporation (“IACE”), with offices at 6160 West Tropicana Ave, Suite E-13, Las Vegas, Nevada 89103, and INVESTMENT EVOLUTION GLOBAL CORPORATION, a Delaware corporation (“IEG US”), and IEG HOLDINGS LIMITED, an Australian company (“IEGH” or the “IEG US Shareholder”), upon the following premises:
Premises
WHEREAS, IACE is a publicly held corporation organized under the laws of the State of Florida;
WHEREAS, IEG US is a privately-held company organized under the laws of Delaware;
WHEREAS, IEGH is a company organized under the laws of Australia and owns all of the issued and outstanding shares of IEG US representing a 100% interest in IEG US;
WHEREAS, IACE agrees to acquire 100% of the issued and outstanding shares of IEG US from IEGH in exchange for the issuance of 267,747,137 shares of IACE’s Common Stock par value $0.001 per share representing approximately 99.1% of the issued and outstanding shares of IACE’s common stock after giving effect to a proposed 6 for 1 reverse stock split as provided for herein and is hereinafter referred to as the “Exchange”. On the Closing Date, IEGH will become a shareholder of IACE.
WHEREAS, for Federal income tax purposes, it is intended that the Exchange qualify as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”); and
Agreement
NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the parties to be derived herefrom, and intending to be legally bound hereby, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF IEG US
As an inducement to, and to obtain the reliance of IACE, except as set forth in the IEG US Schedules (as hereinafter defined), IEG US represents and warrants as of the Closing Date (as hereinafter defined), as follows:
Section 1.01 Incorporation . IEG US is a company duly organized, validly existing, and in good standing under the laws of Delaware and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted. Included in the IEG US Schedules is a complete and correct copy of the Articles of Incorporation of IEG US as in effect on the date hereof. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of IEG US’s Articles of Incorporation. IEG US has taken all actions required by law, its Articles of Incorporation, or otherwise to authorize the execution and delivery of this Agreement. IEG US has full power, authority, and legal capacity and has taken all action required by law, its Articles of Incorporation, and otherwise to consummate the transactions herein contemplated.
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Section 1.02 Authorized Shares and Capital . The authorized number of common shares with no par value of IEG US is 3,000 with 3,000 shares issued and outstanding. IEGH owns all of the issued and outstanding shares of IEG US representing a 100% interest in IEG US. The issued and outstanding shares are validly issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person.
Section 1.03 Subsidiaries and Predecessor Corporations . IEG US owns a 100% interest in Investment Evolution Corporation, a Delaware corporation (“IEC”) and IEC SPV, LLC, a Delaware limited liability company (“IEC SPV”) (the “Subsidiaries”). Except for its ownership interest in the Subsidiaries, IEG US does not have any subsidiaries, and does not own, beneficially or of record, any shares of any other corporation. For purposes hereinafter, the term “IEG US” also includes the Subsidiaries.
Section 1.04 Financial Statements .
(a) Included in the IEG US Schedules are (i) the unaudited balance sheets of IEG US and its Subsidiaries as of December 31, 2012 and the related statements of operations, stockholders’ equity and cash flows for the period ended December 31, 2012.
(b) All such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved. The IEG US balance sheets are true and accurate and present fairly as of their respective dates the financial condition of IEG US. As of the date of such balance sheets, except as and to the extent reflected or reserved against therein, IEG US had no liabilities or obligations (absolute or contingent) which should be reflected in the balance sheets or the notes thereto prepared in accordance with generally accepted accounting principles, and all assets reflected therein are properly reported and present fairly the value of the assets of IEG US, in accordance with generally accepted accounting principles. The statements of operations, stockholders’ equity and cash flows reflect fairly the information required to be set forth therein by generally accepted accounting principles.
(c) IEG US has duly and punctually paid all Governmental fees and taxation which it has become liable to pay and has duly allowed for all taxation reasonably foreseeable and is under no liability to pay any penalty or interest in connection with any claim for governmental fees or taxation and IEG US has made any and all proper declarations and returns for taxation purposes and all information contained in such declarations and returns is true and complete and full provision or reserves have been made in its financial statements for all Governmental fees and taxation.
(d) The books and records, financial and otherwise, of IEG US are in all material aspects complete and correct and have been maintained in accordance with good business and accounting practices.
(e) All of IEG US’s assets are reflected on its financial statements, and, except as set forth in the IEG US Schedules or the financial statements of IEG US or the notes thereto, IEG US has no material liabilities, direct or indirect, matured or unmatured, contingent or otherwise.
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Section 1.05 Information . The information concerning IEG US set forth in this Agreement and in the IEG US Schedules is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading. In addition, IEG US has fully disclosed in writing to IACE (through this Agreement or the IEG US Schedules) all information relating to matters involving IEG US or its assets or its present or past operations or activities which (i) indicated or may indicate, in the aggregate, the existence of a greater than $50,000 liability, (ii) have led or may lead to a competitive disadvantage on the part of IEG US or (iii) either alone or in aggregation with other information covered by this Section, otherwise have led or may lead to a material adverse effect on IEG US, its assets, or its operations or activities as presently conducted or as contemplated to be conducted after the Closing Date, including, but not limited to, information relating to governmental, employee, environmental, litigation and securities matters and transactions with affiliates.
Section 1.06 Options or Warrants . There are no existing options, warrants, calls, or commitments of any character relating to the authorized and unissued stock of IEG US.
Section 1.07 Absence of Certain Changes or Events . Since December 31, 2012 or such other date as provided for herein:
(a) there has not been any material adverse change in the business, operations, properties, assets, or condition (financial or otherwise) of IEG US;
(b) IEG US has not (i) amended its Articles of Incorporation since February 20, 2008; (ii) declared or made, or agreed to declare or make, any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any of its shares; (iii) made any material change in its method of management, operation or accounting, (iv) entered into any other material transaction other than sales in the ordinary course of its business; or (v) made any increase in or adoption of any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement made to, for, or with its officers, directors, or employees; and
(c) Except as disclosed on Schedule 1.07(c),IEG US has not (i) granted or agreed to grant any options, warrants or other rights for its stocks, bonds or other corporate securities calling for the issuance thereof, (ii) borrowed or agreed to borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent) except as disclosed herein and except liabilities incurred in the ordinary course of business; (iii) sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights or canceled, or agreed to cancel, any debts or claims; or (iv) issued, delivered, or agreed to issue or deliver any stock, bonds or other corporate securities including debentures (whether authorized and unissued or held as treasury stock) except in connection with this Agreement.
Section 1.08 Litigation and Proceedings . Except as disclosed on Schedule 1.08, there are no actions, suits, proceedings, or investigations pending or, to the knowledge of IEG US after reasonable investigation, threatened by or against IEG US or affecting IEG US or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind. IEG US does not have any knowledge of any material default on its part with respect to any judgment, order, injunction, decree, award, rule, or regulation of any court, arbitrator, or governmental agency or instrumentality or of any circumstances which, after reasonable investigation, would result in the discovery of such a default.
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Section 1.09 Contracts .
(a) All “material” contracts, agreements, franchises, license agreements, debt instruments or other commitments to which IEG US is a party or by which it or any of its assets, products, technology, or properties are bound other than those incurred in the ordinary course of business are set forth on Schedule 1.09(a). A “material” contract, agreement, franchise, license agreement, debt instrument or commitment is one which (i) will remain in effect for more than six (6) months after the date of this Agreement or (ii) involves aggregate obligations of at least fifty thousand dollars ($50,000);
(b) All contracts, agreements, franchises, license agreements, and other commitments to which IEG US is a party or by which its properties are bound and which are material to the operations of IEG US taken as a whole are valid and enforceable by IEG US in all respects, except as limited by bankruptcy and insolvency laws and by other laws affecting the rights of creditors generally; and
(c) Except as included or described in Schedules 1.09(c) or reflected in the most recent IEG US balance sheet, IEG US is not a party to any oral or written (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (iii) agreement, contract, or indenture relating to the borrowing of money, (iv) guaranty of any obligation; (vi) collective bargaining agreement; or (vii) agreement with any present or former officer or director of IEG US.
Section 1.10 Compliance With Laws and Regulations . To the best of its knowledge, IEG US has complied with all applicable statutes and regulations of any federal, state, or other governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties, assets, or condition of IEG US or except to the extent that noncompliance would not result in the occurrence of any material liability for IEG US.
Section 1.11 Approval of Agreement . The Board of Directors of IEG US has authorized the execution and delivery of this Agreement by IEG US and has approved this Agreement and the transactions contemplated hereby, and will recommend to IEGH that the SHARE EXCHANGE be accepted.
Section 1.12 IEG US Schedules . IEG US has delivered to IACE the following schedules, which are collectively referred to as the “IEG US Schedules” and which consist of separate schedules dated as of the date of execution of this Agreement, all certified by the chief executive officer of IEG US as complete, true, and correct as of the date of this Agreement in all material respects:
(a) a schedule containing complete and correct copies of the Articles of Incorporation of IEG US in effect as of the date of this Agreement;
(b) a schedule containing the financial statements of IEG US identified in paragraph 1.04(a);
(c) a schedule setting forth a description of any material adverse change in the business, operations, property, inventory, assets, or condition of IEG US since December 31, 2012, required to be provided pursuant to section 1.07 hereof;
(d) a schedule of any exceptions to the representations made herein; and
(e) a schedule containing the other information requested above.
IEG US shall cause the IEG US Schedules and the instruments and data delivered to IACE hereunder to be promptly updated after the date hereof up to and including the Closing Date.
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Section 1.13 Valid Obligation . This Agreement and all agreements and other documents executed by IEG US in connection herewith constitute the valid and binding obligation of IEG US, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF IACE
As an inducement to, and to obtain the reliance of IEG US and IEGH, except as set forth in the IACE Schedules (as hereinafter defined), IACE represents and warrants, as of the date hereof and as of the Closing Date, as follows:
Section 2.01 Organization . IACE is a corporation duly organized, validly existing, and in good standing under the laws of the State of Florida and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted. Included in the IACE Schedules are complete and correct copies of the certificate of incorporation and bylaws of IACE as in effect on the date hereof. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of IACE’s certificate of incorporation or bylaws. IACE has taken all action required by law, its certificate of incorporation, its bylaws, or otherwise to authorize the execution and delivery of this Agreement, and IACE has full power, authority, and legal right and has taken all action required by law, its certificate of incorporation, bylaws, or otherwise to consummate the transactions herein contemplated.
Section 2.02 Capitalization . IACE’s authorized capitalization consists of (a) 50,000,000 shares of common stock, par value $0.001 per share (“IACE Common Stock”), of which 44,906,742 shares are issued and outstanding, and (b) 50,000,000 shares of preferred stock, par value $.001 per share, none of which are issued and outstanding. All issued and outstanding shares are legally issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person.
Section 2.03 Subsidiaries and Predecessor Corporations . IACE does not have any predecessor corporation(s), no subsidiaries, and does not own, beneficially or of record, any shares of any other corporation.
Section 2.04 INTENTIONALLY OMITTED .
Section 2.05 Information . The information concerning IACE set forth in this Agreement and the IACE Schedules is complete and accurate in all material respects and does not contain any untrue statements of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading. In addition, IACE has fully disclosed in writing to IEGH (through this Agreement or the IACE Schedules) all information relating to matters involving IACE or its assets or its present or past operations or activities which (i) indicated or may indicate, in the aggregate, the existence of a greater than $50,000 liability, (ii) have led or may lead to a competitive disadvantage on the part of IACE or (iii) either alone or in aggregation with other information covered by this Section, otherwise have led or may lead to a material adverse effect on IACE, its assets, or its operations or activities as presently conducted or as contemplated to be conducted after the Closing Date, including, but not limited to, information relating to governmental, employee, environmental, litigation and securities matters and transactions with affiliates.
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Section 2.06 Options or Warrants . Except as set forth in Schedule 2.06, there are no options, warrants, convertible securities, subscriptions, stock appreciation rights, phantom stock plans or stock equivalents or other rights, agreements, arrangements or commitments (contingent or otherwise) of any character issued or authorized by IACE relating to the issued or unissued capital stock of IACE (including, without limitation, rights the value of which is determined with reference to the capital stock or other securities of IACE) or obligating IACE to issue or sell any shares of capital stock of, or options, warrants, convertible securities, subscriptions or other equity interests in, IACE. There are no outstanding contractual obligations of IACE to repurchase, redeem or otherwise acquire any shares of IACE Common Stock of IACE or to pay any dividend or make any other distribution in respect thereof or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any person.
Section 2.07 Absence of Certain Changes or Events . Since December 31, 2012:
(a) there has not been (i) any material adverse change in the business, operations, properties, assets or condition of IACE or (ii) any damage, destruction or loss to IACE (whether or not covered by insurance) materially and adversely affecting the business, operations, properties, assets or condition of IACE;
(b) IACE has not (i) amended its certificate of incorporation or bylaws except as required by this Agreement; (ii) declared or made, or agreed to declare or make any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any of its capital stock; (iii) waived any rights of value which in the aggregate are outside of the ordinary course of business or material considering the business of IACE; (iv) made any material change in its method of management, operation, or accounting; (v) entered into any transactions or agreements other than in the ordinary course of business; (vi) made any accrual or arrangement for or payment of bonuses or special compensation of any kind or any severance or termination pay to any present or former officer or employee; (vii) increased the rate of compensation payable or to become payable by it to any of its officers or directors or any of its salaried employees whose monthly compensation exceed $1,000; or (viii) made any increase in any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement, made to, for or with its officers, directors, or employees;
(c) IACE has not (i) granted or agreed to grant any options, warrants, or other rights for its stock, bonds, or other corporate securities calling for the issuance thereof; (ii) borrowed or agreed to borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent) except liabilities incurred in the ordinary course of business; (iii) paid or agreed to pay any material obligations or liabilities (absolute or contingent) other than current liabilities reflected in or shown on the most recent IACE balance sheet and current liabilities incurred since that date in the ordinary course of business and professional and other fees and expenses in connection with the preparation of this Agreement and the consummation of the transaction contemplated hereby; (iv) sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights (except assets, properties, or rights not used or useful in its business which, in the aggregate have a value of less than $1,000), or canceled, or agreed to cancel, any debts or claims (except debts or claims which in the aggregate are of a value less than $1,000); (v) made or permitted any amendment or termination of any contract, agreement, or license to which it is a party if such amendment or termination is material, considering the business of IACE; or (vi) issued, delivered or agreed to issue or deliver, any stock, bonds or other corporate securities including debentures (whether authorized and unissued or held as treasury stock), except in connection with this Agreement; and
(d) to its knowledge, IACE has not become subject to any law or regulation which materially and adversely affects, or in the future, may adversely affect, the business, operations, properties, assets or condition of IACE.
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Section 2.08 Litigation and Proceedings . There are no actions, suits, proceedings or investigations pending or, to the knowledge of IACE after reasonable investigation, threatened by or against IACE or affecting IACE or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind except as disclosed in the IACE Schedules. IACE has no knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator, or governmental agency or instrumentality or any circumstance which after reasonable investigation would result in the discovery of such default.
Section 2.09 Contracts .
(a) IACE is not a party to, and its assets, products, technology and properties are not bound by, any leases, contract, franchise, license agreement, agreement, debt instrument, obligation, arrangement, understanding or other commitments whether such agreement is in writing or oral (“Contracts”).
(b) IACE is not a party to or bound by, and the properties of IACE are not subject to any Contract, agreement, other commitment or instrument; any charter or other corporate restriction; or any judgment, order, writ, injunction, decree, or award; and
(c) IACE is not a party to any oral or written (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (iii) agreement, contract, or indenture relating to the borrowing of money, (iv) guaranty of any obligation, (vi) collective bargaining agreement; or (vii) agreement with any present or former officer or director of IACE.
Section 2.10 No Conflict With Other Instruments . The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of, any indenture, mortgage, deed of trust, or other material agreement or instrument to which IACE is a party or to which any of its assets, properties or operations are subject.
Section 2.11 Compliance With Laws and Regulations . IACE has complied with all United States federal, state or local or any applicable foreign statute, law, rule, regulation, ordinance, code, order, judgment, decree or any other applicable requirement or rule of law (a “Law”) applicable to IACE and the operation of its business. This compliance includes, but is not limited to, the filing of all reports to date with federal and state securities authorities.
Section 2.12 Approval of Agreement . The Board of Directors of IACE has authorized the execution and delivery of this Agreement by IACE and has approved this Agreement and the transactions contemplated hereby.
Section 2.13 Material Transactions or Affiliations . Except as disclosed herein and in the IACE Schedules, there exists no contract, agreement or arrangement between IACE and any predecessor and any person who was at the time of such contract, agreement or arrangement an officer, director, or person owning of record or known by IACE to own beneficially, 5% or more of the issued and outstanding common stock of IACE and which is to be performed in whole or in part after the date hereof or was entered into not more than three years prior to the date hereof. Neither any officer, director, nor 5% Shareholders of IACE has, or has had since inception of IACE, any known interest, direct or indirect, in any such transaction with IACE which was material to the business of IACE. IACE has no commitment, whether written or oral, to lend any funds to, borrow any money from, or enter into any other transaction with, any such affiliated person.
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Section 2.14 IACE Schedules . IACE has delivered to IEGH the following schedules, which are collectively referred to as the “IACE Schedules” and which consist of separate schedules, which are dated the date of this Agreement, all certified by the chief executive officer of IACE to be complete, true, and accurate in all material respects as of the date of this Agreement.
(a) a schedule containing complete and accurate copies of the certificate of incorporation and bylaws of IACE as in effect as of the date of this Agreement;
(b) a schedule setting forth a description of any material adverse change in the business, operations, property, inventory, assets, or condition of IACE since December 31, 2012, required to be provided pursuant to section 2.07 hereof; and
(c) a schedule setting forth any other information, together with any required copies of documents, required to be disclosed in the IACE Schedules by Sections 2.01 through 2.19 and 2.21.
IACE shall cause the IACE Schedules and the instruments and data delivered to IEGH hereunder to be promptly updated after the date hereof up to and including the Closing Date.
Section 2.15 Bank Accounts; Power of Attorney . Set forth in the IACE Schedules is a true and complete list of (a) all accounts with banks, money market mutual funds or securities or other financial institutions maintained by IACE within the past twelve (12) months, the account numbers thereof, and all persons authorized to sign or act on behalf of IACE, (b) all safe deposit boxes and other similar custodial arrangements maintained by IACE within the past twelve (12) months, (c) the check ledger for the last 12 months, and (d) the names of all persons holding powers of attorney from IACE or who are otherwise authorized to act on behalf of IACE with respect to any matter, other than its officers and directors, and a summary of the terms of such powers or authorizations.
Section 2.16 Valid Obligation . This Agreement and all agreements and other documents executed by IACE in connection herewith constitute the valid and binding obligation of IACE, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.
Section 2.17 SEC Filings; Financial Statements .
(a) IACE duty to file reports under Section 13 and 15(d) of the Securities Exchange Act of 1934 was suspended on October 29, 2012.
Section 2.18 OTC Marketplace Quotation . IACE Common Stock is quoted on the OTC Pink No Information tier of the OTC Markets. There is no action or proceeding pending or, to IACE’s knowledge, threatened against IACE by The Financial Industry Regulatory Authority, Inc. ("FINRA") with respect to any intention by such entity to prohibit or terminate the quotation of IACE Common Stock on the OTC Pink No Information tier.
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ARTICLE III
SHARE EXCHANGE
Section 3.01 The Exchange . On the terms and subject to the conditions set forth in this Agreement, on the Closing Date (as defined in Section 3.03), IEGH shall sell, assign, transfer and deliver, free and clear of all liens, pledges, encumbrances, charges, restrictions or known claims of any kind, nature, or description, all of the shares of IEG US held by IEGH; the objective of such purchase (the “Exchange”) being the acquisition by IACE of not less than 100% of the issued and outstanding shares of IEG US. In exchange for the transfer of such securities by IEGH, IACE shall deliver to IEGH 267,747,137 shares of IACE’s common stock (the “Exchange Shares”) representing approximately 99.1% of the issued and outstanding shares of IACE’s common stock after giving effect to a proposed 6 for 1 reverse stock split as provided for herein and is hereinafter referred to as the “Exchange Consideration”. At the Closing Date, IEGH shall, on surrender of its certificate representing its IEG US shares to IACE or its registrar or transfer agent, be entitled to receive a certificate or certificates evidencing its ownership of the Exchange Shares.
Upon consummation of the transaction contemplated herein, all of the issued and outstanding shares of IEG US shall be held by IACE.
Section 3.02 Closing . The closing (“Closing”) of the transactions contemplated by this Agreement shall occur following completion of the conditions set forth in Articles V and VI, and upon delivery of the Exchange Consideration as described in Section 3.01 herein. The Closing shall take place at a mutually agreeable time and place and is anticipated to close by no later than March 11, 2013.
Section 3.03 Closing Events . At the Closing, IACE, IEG US and IEGH shall execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged, and delivered), any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably requested by the parties hereto and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby.
Section 3.04 Termination . This Agreement may be terminated by the Board of Directors of IEGH or IACE only in the event that IACE or IEG US do not meet the conditions precedent set forth in Articles V and VI. If this Agreement is terminated pursuant to this section, this Agreement shall be of no further force or effect, and no obligation, right or liability shall arise hereunder.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records . IACE and IEG US will each afford to the officers and authorized representatives of the other full access to the properties, books and records of IACE or IEG US, as the case may be, in order that each may have a full opportunity to make such reasonable investigation as it shall desire to make of the affairs of the other, and each will furnish the other with such additional financial and operating data and other information as to the business and properties of IACE or IEG US, as the case may be, as the other shall from time to time reasonably request. Without limiting the foregoing, as soon as practicable after the end of each fiscal quarter (and in any event through the last fiscal quarter prior to the Closing Date), each party shall provide the other with quarterly internally prepared and unaudited financial statements.
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Section 4.02 Delivery of Books and Records . At the Closing, IACE shall deliver to IEGH, the originals of the corporate minute books, books of account, contracts, records, and all other books or documents of IACE now in the possession of IACE or its representatives.
Section 4.03 Third Party Consents and Certificates . IACE and IEG US agree to cooperate with each other in order to obtain any required third party consents to this Agreement and the transactions herein contemplated.
Section 4.04 IACE SEC Filings . On or after the Closing Date, IACE shall update OTC Markets such that it will provide limited information in accordance with OTC Markets requirements.
Section 4.05 Designation of Directors and Officer . On the Closing Date, the following person will take the position of Director with IACE, Paul Mathieson, and the existing officers shall tender their resignation of all positions held with IACE effective on the Closing Date. In addition, upon the signing of this Agreement, IACE shall immediately appoint as officers of IACE the following persons: Paul Mathieson as Chief Executive Officer, President, Chief Financial Officer and Director, Treasurer and Secretary.
Section 4.06 Actions Prior to Closing .
(a) From and after December 31, 2012 until the Closing Date and except as set forth in the IACE Schedules or IEG US Schedules or as permitted or contemplated by this Agreement, IACE (subject to paragraph (d) below) and IEG US respectively, will each:
(i) carry on its business in substantially the same manner as it has heretofore and as disclosed in the IACE SEC Reports;
(ii) maintain and keep its properties in states of good repair and condition as at present, except for depreciation due to ordinary wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable in amount and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations under material contracts, leases, and instruments relating to or affecting its assets, properties, and business;
(v) use its best efforts to maintain and preserve its business organization intact, to retain its key employees, and to maintain its relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material respects all obligations and duties imposed on it by all federal and state laws and all rules, regulations, and orders imposed by federal or state governmental authorities.
(b) From and after December 31, 2012 until the Closing Date, neither IACE nor IEG US will, except as provided for in Schedule 4.06(b):
(i) make any changes in their Articles of Incorporation, articles or certificate of incorporation or bylaws except as contemplated by this Agreement including a name change;
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(ii) take any action described in Section 1.07 in the case of IEG US or in Section 2.07, in the case of IACE (all except as permitted therein or as disclosed in the applicable party’s schedules);
(iii) enter into or amend any contract, agreement, or other instrument of any of the types described in such party’s schedules, except that a party may enter into or amend any contract, agreement, or other instrument in the ordinary course of business involving the sale of goods or services; or
(iv) sell any assets or discontinue any operations, sell any shares of capital stock or conduct any similar transactions other than in the ordinary course of business except as disclosed in the IACE SEC Reports.
Section 4.07 Indemnification .
(a) IEG US hereby agrees to indemnify IACE and each of the officers, agents and directors of IACE as of the date of execution of this Agreement against any loss, liability, claim, damage, or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing, or defending against any litigation, commenced or threatened, or any claim whatsoever) (“Loss”), to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentations made under Article I of this Agreement. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for one year following the Closing.
(b) IEGH agrees to indemnify IACE and each of the officers, agents and directors of IACE as of the date of execution of this Agreement against any Loss, to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentations made under Article II of this Agreement. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for one year following the Closing.
(c) IACE agrees to indemnify and hold harmless IEG US and each of the officers, agents, and directors of IEG US and IEGH as of the date of execution of this Agreement (the “IEG US Indemnitees”) against any Liabilities incurred or suffered by the IEG US Indemnitees. For this purpose, “Liabilities” shall mean all suits, proceedings, claims, expenses, losses, costs, liabilities, judgments, deficiencies, assessments, actions, investigations, penalties, fines, settlements, interest and damages (including reasonable attorneys' fees and expenses), whether suit is instituted or not and, if instituted, whether at any trial or appellate level, and whether raised by the parties hereto or a third party, incurred or suffered by the IEG US Indemnitees or any of them arising from, in connection with or as a result of (a) any false or inaccurate representation or warranty made by or on behalf of IACE in or pursuant to this Agreement; (b) any default or breach in the performance of any of the covenants or agreements made by IACE in or pursuant to this Agreement; (c) the operation of IACE’s business prior to the Closing; (d) any obligation or liability of IACE which is not included in IACE’s Financial Statements (e) any breach of the contracts prior to the Closing; and (f) any Liabilities arising out of the claims of creditors of IACE or any party claiming by, through or under such creditor, including, but not limited to, any bankruptcy trustee or debtor-in-possession. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for one year following the Closing.
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Section 4.08 The Acquisition of IACE Common Stock . IACE and IEGH understand and agree that the consummation of this Agreement including the delivery of the Exchange Consideration to IEGH in exchange for the IEG US Shares as contemplated hereby constitutes the offer and sale of securities under the Securities Act and applicable state statutes. IACE and IEG US agree that such transactions shall be consummated in reliance on exemptions from the registration and prospectus delivery requirements of such statutes, which depend, among other items, on the circumstances under which such securities are acquired.
(a) In order to provide documentation for reliance upon the exemptions from the registration and prospectus delivery requirements for such transactions, IEGH shall execute and deliver to IACE a Suitability Letter and an Investment Representation Letter in substantially the same form as that attached hereto as Exhibit A and Exhibit B , respectively.
(b) In connection with the transaction contemplated by this Agreement, IACE and IEG US shall each file, with the assistance of the other and their respective legal counsel, such notices, applications, reports, or other instruments as may be deemed by them to be necessary or appropriate in an effort to document reliance on such exemptions, and the appropriate regulatory authority in the states where the Shareholder of IEG US reside unless an exemption requiring no filing is available in such jurisdictions, all to the extent and in the manner as may be deemed by such parties to be appropriate.
(c) In order to more fully document reliance on the exemptions as provided herein, IEG US, IEGH, and IACE shall execute and deliver to the other, at or prior to the Closing, such further letters of representation, acknowledgment, suitability, or the like as IEGH or IACE and their respective counsel may reasonably request in connection with reliance on exemptions from registration under such securities laws.
(d) IEGH acknowledges that the basis for relying on exemptions from registration or qualifications are factual, depending on the conduct of the various parties, and that no legal opinion or other assurance will be required or given to the effect that the transactions contemplated hereby are in fact exempt from registration or qualification.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF IACE
The obligations of IACE under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 Accuracy of Representations and Performance of Covenants . The representations and warranties made by IEG US and IEGH in this Agreement were true when made and shall be true at the Closing Date with the same force and effect as if such representations and warranties were made at and as of the Closing Date (except for changes therein permitted by this Agreement). IEG US shall have performed or complied with all covenants and conditions required by this Agreement to be performed or complied with by IEG US prior to or at the Closing. IACE shall be furnished with a certificate, signed by a duly authorized executive officer of IEG US and dated the Closing Date, to the foregoing effect.
Section 5.02 Officer’s Certificate . IACE shall have been furnished with a certificate dated the Closing Date and signed by a duly authorized officer of IEG US to the effect that no litigation, proceeding, investigation, or inquiry is pending, or to the best knowledge of IEG US threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement, or, to the extent not disclosed in the IEG US Schedules, by or against IEG US, which might result in any material adverse change in any of the assets, properties, business, or operations of IEG US.
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Section 5.03 Approval by IEGH . The Exchange shall have been approved by the holders of not less than one hundred percent (100%) of the shares, including voting power, of IEG US, unless a lesser number is agreed to by IACE.
Section 5.04 No Governmental Prohibition . No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.
Section 5.05 Consents . All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of IEG US after the Closing Date on the basis as presently operated shall have been obtained.
Section 5.06 Other Items .
(a) IACE shall have received a list containing the name, address, and number of shares held by IEGH as of the date of Closing, certified by an executive officer of IEG US as being true, complete and accurate; and
(b) IACE shall have received such further opinions, documents, certificates or instruments relating to the transactions contemplated hereby as IACE may reasonably request.
(c) IACE shall have completed the Additional Exchanges.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF IEG US
AND IEGH
The obligations of IEG US and IEGH under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants . The representations and warranties made by IACE in this Agreement were true when made and shall be true as of the Closing Date (except for changes therein permitted by this Agreement) with the same force and effect as if such representations and warranties were made at and as of the Closing Date. Additionally, IACE shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by IACE.
Section 6.02 Officer’s Certificate . IEG US shall have been furnished with certificates dated the Closing Date and signed by duly authorized executive officers of IACE, to the effect that no litigation, proceeding, investigation or inquiry is pending, or to the best knowledge of IACE threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement or, to the extent not disclosed in the IACE Schedules, by or against IACE, which might result in any material adverse change in any of the assets, properties or operations of IACE.
Section 6.03 Good Standing . IEG US shall have received a certificate of good standing from the Secretary of State of Florida or other appropriate office, dated as of a date within ten days prior to the Closing Date certifying that IACE is in good standing as a corporation in the State of Florida and has filed all tax returns required to have been filed by it to date and has paid all taxes reported as due thereon.
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Section 6.04 No Governmental Prohibition . No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.
Section 6.05 Approval by IACE Board of Directors and its Shareholders . IACE board of directors and, to the extent required under Florida law, its shareholders shall have approved the Exchange and the following (the “Corporate Actions”):
(a) change the name of the IACE to IEG HOLDINGS CORPORATION (the “ Name Change ”),
(b) increase authorized common stock to 1,000,000,000 shares of common stock, $.001 par value, which such shares shall be issuable on such terms and conditions as the Board of Directors of IACE may determine from time to time (the “ Common Stock ”),
(c) creation of shares of preferred stock, consisting of 50,000,000 shares, which such shares shall be issuable in such series, and with such designations, rights and preferences as the Board of Directors may determine from time to time (the “ Preferred Stock ”),
(d) effect a 6:1 reverse stock split of the Company’s issued and outstanding common stock (the “ Reverse Stock Split ”) and
(e) adopt such other articles as set forth in the form of Amended and Restated Articles attached hereto as Exhibit C (the “ Additional Articles ”).
Section 6.06 Consents . All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of IACE after the Closing Date on the basis as presently operated shall have been obtained including approval of the Corporate Actions by FINRA.
Section 6.07 Shareholder Report .
IEGH shall receive a shareholder’s report reflective of all IACE shareholder’s which does not exceed 44,906,742 shares of IACE common stock issued and outstanding as of the day prior to the Closing Date and no shares of preferred stock outstanding.
Section 6.08 Other Items .
(a) IEGH shall have received further opinions, documents, certificates, or instruments relating to the transactions contemplated hereby as IEGH may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Brokers . IACE and IEG US agree that, except as set out on Schedule 7.01 attached hereto, there were no finders or brokers involved in bringing the parties together or who were instrumental in the negotiation, execution or consummation of this Agreement. IACE and IEG US each agree to indemnify the other against any claim by any third person other than those described above for any commission, brokerage, or finder’s fee arising from the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such third person, whether express or implied from the actions of the indemnifying party.
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Section 7.02 Governing Law . This Agreement shall be governed by, enforced, and construed under and in accordance with the laws of the United States of America and, with respect to the matters of state law, with the laws of the State of Florida. Venue for all matters shall be in Palm Beach County, Florida, without giving effect to principles of conflicts of law thereunder. Each of the parties (a) irrevocably consents and agrees that any legal or equitable action or proceedings arising under or in connection with this Agreement shall be brought exclusively in the federal courts of the United States. By execution and delivery of this Agreement, each party hereto irrevocably submits to and accepts, with respect to any such action or proceeding, generally and unconditionally, the jurisdiction of the aforesaid court, and irrevocably waives any and all rights such party may now or hereafter have to object to such jurisdiction.
Section 7.03 Notices . Any notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered to it or sent by telecopy, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:
If to IEGH and IEG US, to:
c/o Boardroom Pty Limited
Level 7
207 Kent Street
Sydney NSW 2000
If to IACE, to:
6160 West Tropicana Ave, Suite E-13
Las Vegas, Nevada 89103
or such other addresses as shall be furnished in writing by any party in the manner for giving notices hereunder, and any such notice or communication shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3) days after mailing, if sent by registered or certified mail.
Section 7.04 Attorney’s Fees . In the event that either party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing party shall be reimbursed by the losing party for all costs, including reasonable attorney’s fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.
Section 7.05 Confidentiality . Each party hereto agrees with the other that, unless and until the transactions contemplated by this Agreement have been consummated, it and its representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal inspection, of such other party, and shall not use such data or information or disclose the same to others, except (i) to the extent such data or information is published, is a matter of public knowledge, or is required by law to be published; or (ii) to the extent that such data or information must be used or disclosed in order to consummate the transactions contemplated by this Agreement. In the event of the termination of this Agreement, each party shall return to the other party all documents and other materials obtained by it or on its behalf and shall destroy all copies, digests, work papers, abstracts or other materials relating thereto, and each party will continue to comply with the confidentiality provisions set forth herein.
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Section 7.06 Public Announcements and Filings . Unless required by applicable law or regulatory authority, none of the parties will issue any report, statement or press release to the general public, to the trade, to the general trade or trade press, or to any third party (other than its advisors and representatives in connection with the transactions contemplated hereby) or file any document, relating to this Agreement and the transactions contemplated hereby, except as may be mutually agreed by the parties. Copies of any such filings, public announcements or disclosures, including any announcements or disclosures mandated by law or regulatory authorities, shall be delivered to each party at least one (1) business day prior to the release thereof.
Section 7.07 Schedules; Knowledge . Each party is presumed to have full knowledge of all information set forth in the other party’s schedules delivered pursuant to this Agreement.
Section 7.08 Third Party Beneficiaries . This contract is strictly between IACE, IEGH and IEG US, and, except as specifically provided, no director, officer, stockholder (other than IEGH), employee, agent, independent contractor or any other person or entity shall be deemed to be a third party beneficiary of this Agreement.
Section 7.09 Expenses . Subject to Section 7.04 above, whether or not the Exchange is consummated, each of IACE and IEG US will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with the Exchange or any of the other transactions contemplated hereby.
Section 7.10 Entire Agreement . This Agreement represents the entire agreement between the parties relating to the subject matter thereof and supersedes all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.
Section 7.11 Survival; Termination . The representations, warranties, and covenants of the respective parties shall survive the Closing Date and the consummation of the transactions herein contemplated for a period of two years.
Section 7.12 Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument.
Section 7.13 Amendment or Waiver . Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to the Closing Date, this Agreement may by amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance may be extended by a writing signed by the party or parties for whose benefit the provision is intended.
Section 7.14 Best Efforts . Subject to the terms and conditions herein provided, each party shall use its best efforts to perform or fulfill all conditions and obligations to be performed or fulfilled by it under this Agreement so that the transactions contemplated hereby shall be consummated as soon as practicable. Each party also agrees that it shall use its best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective this Agreement and the transactions contemplated herein.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to be executed by their respective officers, hereunto duly authorized, as of the date first-above written.
IDEAL ACCENTS, INC. | ||
A Florida corporation | ||
By: | /s/ Paul Mathieson | |
Paul Mathieson, Chief Executive Officer | ||
INVESTMENT EVOLUTION GLOBAL CORPORATION, | ||
A Delaware corporation | ||
By: | /s/ Paul Mathieson | |
Paul Mathieson, Chief Executive Officer | ||
IEG HOLDINGS LIMITED, | ||
An Australian company | ||
By: | /s/ Paul Mathieson | |
Paul Mathieson, Chief Executive Officer |
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Ideal Accents, Inc. (“IACE”)
Share Exchange Agreement
Exhibit and Schedules
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Exhibit A
SUITABILITY LETTER
TO: | Ideal Accents, Inc. (“IACE”) |
The undersigned (the “Subscriber”) makes the following representations with the intent that they may be relied on by Ideal Accents, Inc., a Florida corporation (the “Company”), in determining my suitability as a purchaser of shares of the common stock of the Company (the “Shares”) in reliance upon an exemption from securities registration afforded by the provisions of Section 4(2), Section 4(6) , Regulation D (“ Regulation D ”) and/or Regulation S (“Regulation S”) as promulgated by the United States Securities and Exchange Commission (the “Commission ”) under the Securities Act of 1933, as amended (the “Securities Act ”):
1. Information on Subscriber. The Subscriber (i) is, and will be on the Closing Date, an “accredited investor ”, as such term is defined in Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), (ii) is experienced in investments and business matters, (iii) has made investments of a speculative nature and has purchased securities of United States publicly-owned companies in private placements in the past and, (iv) alone or with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable the Subscriber to utilize the information made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment. The Subscriber is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof. The information set forth on the signature page hereto regarding the Subscriber is accurate and complete in all material respects.
2. Communication of Offer. The offer to sell the Securities was directly communicated to the Subscriber by the Company. At no time was the Subscriber presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer.
3. No Governmental Review. The Subscriber understands that no United States federal or state agency or any other governmental or state agency has passed on or made recommendations or endorsement of the Shares or the suitability of the investment in the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.
4. Subscriber understands that the investment offered hereunder has not been registered under the Securities Act and he/she further understands that he/she is purchasing the Shares without being furnished any offering literature or prospectus. Subscriber is acquiring the Shares for Subscriber’s own account, for investment purposes only, and not with a view towards resale or distribution.
5. Subscriber is not a “U.S. Person” which is defined below:
(a) Any natural person resident in the United States;
(b) Any partnership or corporation organized or incorporated under the laws of the United States;
(c) Any estate of which any executor or administrator is a U.S. Person;
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(d) Any trust of which any trustee is a U.S. Person;
(e) Any agency or branch of a foreign entity located in the United States;
(f) Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person;
(g) Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident of the United States; and
(h) Any partnership or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) of Regulation D promulgated under the Securities Act) who are not natural persons, estates or trusts.
“United States” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.
6. Subscriber (i) as of the execution date of this Agreement is not located within the United States, and (ii) is not purchasing the Shares for the benefit of any U.S. Person.
7. Subscriber will not resell the Shares except in accordance with the provisions of Regulation S (Rule 901 through 905 and Preliminary Notes thereto), pursuant to a registration under the Securities Act, or pursuant to an available exemption from registration; and agrees not to engage in hedging transaction with regard to such securities unless in compliance with the Securities Act.
8. Subscriber will not engage in hedging transactions with regard to Shares of the Company prior to the expiration of the distribution compliance period specified in Category 2 or 3 (paragraph (b)(2) or (b)(3)) in Rule 903 of Regulation S, as applicable, unless in compliance with the Securities Act; and as applicable, shall include statements to the effect that the securities have not been registered under the Securities Act and may not be offered or sold in the United States or to U.S. Persons (other than distributors) unless the securities are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available.
DATED this 28th day of January, 2013.
SUBSCRIBER: | ||
IEG HOLDINGS LIMITED | ||
By: | ||
Paul Mathieson, Chief Executive Officer |
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Exhibit B
INVESTMENT LETTER
Ideal Accents, Inc.
Re: Purchase of shares of Common Stock of Ideal Accents, Inc. (“IACE”)
Gentlemen:
In connection with the acquisition by the undersigned of shares of Ideal Accents, Inc.’s Common Stock (the “Securities”), the undersigned represents that the Securities are being acquired without a view to, or for, resale in connection with any distribution of such Securities or any interest therein without registration or other compliance under the Securities Act of 1933, as amended (the “Securities Act”), and that the undersigned has no direct or indirect participation in any such undertaking or in the underwriting of such an undertaking.
The undersigned understands that the Securities have not been registered, but are being acquired by reason of a specific exemption under the Securities Act as well as under certain state statutes for transactions by an issuer not involving any public offering and that any disposition of the subject Securities may, under certain circumstances, be inconsistent with this exemption and may make the undersigned an “underwriter” within the meaning of the Securities Act. It is understood that the definition of an “underwriter” focuses on the concept of “distribution” and that any subsequent disposition of the subject Securities can only be effected in transactions which are not considered distributions. Generally, the term “distribution” is considered synonymous with “public offering” or any other offer or sale involving general solicitation or general advertising. Under present law, in determining whether a distribution occurs when securities are sold into the public market, under certain circumstances one must consider the availability of public information regarding the issuer, a holding period for the securities sufficient to assure that the persons desiring to sell the securities without registration first bear the economic risk of their investment, and a limitation on the number of securities which the stockholder is permitted to sell and on the manner of sale, thereby reducing the potential impact of the sale on the trading markets. These criteria are set forth specifically in rule 144 promulgated under the Securities Act. After one year from the date the Securities are fully paid for and the subscription is accepted by the issuer, all as calculated in accordance with rule 144(d), sales of the Securities in reliance on rule 144 can only be made in limited amounts in accordance with the terms and conditions of that rule. After two year from the date the Securities are fully paid for, as calculated in accordance with rule 144(d), it can generally be sold without meeting these conditions provided the holder is not (and has not been for the preceding three months) an affiliate of the issuer.
B- 1 |
Exhibit B
Ideal Accents, Inc.
Page Two
The undersigned acknowledges that the Securities must be held and may not be sold, transferred, or otherwise disposed of for value unless it is subsequently registered under the Securities Act or an exemption from such registration is available; the issuer is under no obligation to register the Securities under the Securities Act or under section 12 of the Securities Exchange Act of 1934, as amended, except as may be expressly agreed to by it in writing; if rule 144 is available, and no assurance is given that it will be, initially only routine sales of such Securities in limited amounts can be made in reliance on rule 144 in accordance with the terms and conditions of that rule; the issuer is under no obligation to the undersigned to make rule 144 available, except as may be expressly agreed to by it in writing; in the event rule 144 is not available, compliance with regulation A or some other exemption may be required before the undersigned can sell, transfer, or otherwise dispose of such Securities without registration under the Securities Act; the issuer’s registrar and transfer agent will maintain a stop transfer order against the registration of transfer of the Securities; and the certificate representing the Common Stock composing the Securities will bear a legend in substantially the following form so restricting the sale of such Securities.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ARE “RESTRICTED SECURITIES” WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.
The issuer may refuse to register transfer of the Securities in the absence of compliance with Rule 144 unless the undersigned furnishes the issuer with a “no-action” or interpretative letter from the Securities and Exchange Commission or an opinion of counsel reasonably acceptable to the issuer stating that the transfer is proper; further, unless such letter or opinion states that the Securities are free of any restrictions under the Securities Act, the issuer may refuse to transfer the Securities to any transferee who does not furnish in writing to the issuer the same representations and agree to the same conditions with respect to such Securities as are set forth herein. The issuer may also refuse to transfer the Securities if any circumstances are present reasonably indicating that the transferee’s representations are not accurate.
Very truly yours, | ||
IEG HOLDINGS LIMITED | ||
Dated: 1/28/13 | By: | |
Paul Mathieson, Chief Executive Officer |
B- 2 |
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
IDEAL ACCENTS, INC.
Pursuant to the provisions of Section 607.1007 of the Florida Business Corporation Act, Ideal Accents, Inc., a corporation organized and existing under and by virtue of the Business Corporation Act of the State of Florida (the “Corporation”), bearing document number P99000006262, hereby amends and restates its Articles of Incorporation as follows:
ARTICLE I - NAME
The name of the corporation is IEG Holdings Corporation (the “Corporation”).
ARTICLE II - PURPOSE
The Corporation is organized for the purpose of transacting any or all lawful business for corporations organized under the Florida Business Corporation Act, as amended (the “Act”), of the Slate of Florida.
ARTICLE III - CAPITAL STOCK
Section 1. Authorized Capital Stock. The aggregate number of shares which the Corporation shall have the authority to issue is 1,050,000,000 shares, of which 1,000,000,000 shares shall be Common Stock, par value $.001 per share (the “Common Stock”), and 50,000,000 shares shall be Preferred Stock, par value $.001 per share (the “Preferred Stock”).
Section 2. Preferred Stock. The Board of Directors is authorized at any time, and from time to time, to provide the for the issuance of shares of Preferred Stock in one or more series, and to determine the designations, preferences, limitations and relative or other rights of the Preferred Stock or any series thereof. For each series, the Board of directors shall determine, by resolution or resolutions adopted prior to the issuance of any shares thereof, the designations, preferences, limitations and relative or other rights thereof, including but not limited to the following relative rights and preferences, as to which there may be variations among different series:
(a) The rate and manner of payment of dividends, if any;
(b) Whether shares may be redeemed and, if so, the redemption price and the terms and conditions of redemption;
(c) The amount payable upon shares in the event of liquidation, dissolution or other winding-up of the Corporation;
(d) Sinking fund provisions, if any, for the redemption or purchase of shares;
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(e) The terms and conditions, if any, on which shares may be converted or exchanged;
(f) Voting rights, if any; and
(g) Any other rights and preferences of such shares, to the full extent now or hereafter permitted by the laws of the State of Florida.
The Board of Directors shall have the authority to determine the number of shares that will comprise each series.
Prior to the issuance of any shares of a series, but after adoption by the Board of Directors of the resolution establishing such series, the appropriate officers of the Corporation shall file such documents with the State of Florida as may be required by law.
Section 3. Reverse Stock Split . On the Effective Date of these Amended and Restated Articles of Incorporation, this Corporation will effect a Reverse Stock Split pursuant to which every six (6) issued and outstanding shares of the Corporation’s previously authorized common stock, par value $0.001 per share (the “Old Common Stock”) shall be reclassified and converted into one (1) validly issued, fully paid and non-assessable share of common stock, par value $0.001 (the “New Common Stock”). Each certificate representing shares of Old Common Stock shall thereafter represent the number of shares of New Common Stock into which the shares of Old Common Stock represented by such certificate were reclassified and converted hereby. No cash will be paid or distributed as a result of aforementioned Reverse Stock Split of the Corporation’s Common Stock, and no fractional shares will be issued. All fractional shares which would otherwise be required to be issued as a result of the Reverse Stock Split will be rounded up to a whole share.
ARTICLE IV - PRINCIPAL OFFICE
The street address of the principal office and mailing address of the Corporation is 61660 West Tropicana Ave, Suite E-13, Las Vegas, Nevada 89103.
ARTICLE V - BOARD OF DIRECTORS
The business and affairs of the Corporation shall be managed under the direction of a Board of Directors which shall consist of not less than one person. The manner of election and qualifications shall be provided in the Bylaws of the Corporation. The exact number of directors shall be fixed from time to time by the Board of Directors pursuant to resolution adopted by a majority of the full Board of Directors.
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ARTICLE VI - INDEMNIFICATION
Section 1. Right to Indemnification. Each person (including here and hereinafter, the heirs, executors, administrators or estate of such person) (1) who is or was a director or officer of the Corporation or who is or was serving at the request of the Corporation in the position of a director, officer, trustee, partner, agent or employee of another corporation, partnership, joint venture, trust or other enterprise, or (2) who is or was an agent or employee (other than an officer) of the Corporation and as to whom the Corporation has agreed to grant such indemnity, shall be indemnified by the Corporation as of right to the fullest extent permitted or authorized by current or future legislation or by current or future judicial or administrative decision (but, in the case of any future legislation or decision, only to the extent that it permits the Corporation to provide broader indemnification rights than permitted prior to the legislation or decision), against all fines, liabilities, settlements, costs and expenses, including attorneys’ fees, asserted against him or incurred by him in his capacity as such director, officer, trustee, partner, agent or employee, or arising out of his status as such director, officer, trustee, partner, agent or employee. The foregoing right of indemnification shall not be exclusive of other rights to which those seeking indemnification may be entitled. The Corporation may maintain insurance, at its expense, to protect itself and any such person against any such fine, liability, cost or expense, including attorney’s fees, whether or not the Corporation would have the legal power to directly indemnify him against such liability.
Section 2. Advances. Costs, charges and expenses (including attorneys’ fees) incurred by a person referred to in Section 1 of this Article VI in defending a civil or criminal suit, action or proceeding may be paid (and, in the case of directors and officers of the Corporation, shall be paid) by the Corporation in advance of the final disposition thereof upon receipt of an undertaking to repay all amounts advanced if it is ultimately determined that the person is not entitled to be indemnified by the Corporation as authorized by this Article VI, and upon satisfaction of other conditions established from time to time by the Board of Directors or which may be required by current or future legislation (but, with respect to future legislation, only to the extent that it provides conditions less burdensome than those previously provided).
Section 3. Savings Clause. If this Article VI or any portion of it is invalidated on any ground by a court of competent jurisdiction, the Corporation shall nevertheless indemnify each director and officer of the Corporation to the fullest extent permitted by all portions of this Article VI that has not been invalidated and to the fullest extent permitted by law.
Effective Date . The effective date of these Articles of Amendment to the Articles of Incorporation shall be on February 22, 2013.
Adoption of Amendment . The foregoing Amend and Restated Articles of Incorporation was approved by the Board of Directors of the Corporation by unanimous written consent in lieu of meeting on January 31, 2013.
The Amended and Restated Articles of Incorporation were approved by the written consent of holders a majority of our outstanding common stock, our only voting group, on January 31, 2013. The number of votes cast for the amendment was sufficient for approval by holders of common stock, our only voting group.
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IN WITNESS WHEREOF, the undersigned has executed these Amended and Restated Articles of Incorporation as of February 1, 2013.
IDEAL ACCENTS, INC. | ||
By: | /s/ Paul Mathieson | |
Name: | Paul Mathieson | |
Title: | President and CEO |
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ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
OF
IEG HOLDINGS CORPORATION
Pursuant to Section 607.1006 of the Business Corporation Act of the State of Florida, the undersigned, being the Chief Executive Officer of IEG HOLDINGS CORPORATION, a Florida corporation (the “ Corporation ”), does hereby certify that the following resolutions and amendments (the “Amendment”) were adopted by the Board of Directors and the shareholders of the Corporation.
RESOLVED : That the authorized common stock of the Corporation shall be changed to 2,500,000,000 shares of common stock, $0.001 par value per share.
RESOLVED : That 1,000,000 shares of preferred stock shall be designated as Series A Preferred Stock bearing the attributes set forth below.
RESOLVED : That 410,000 shares of preferred stock shall be designated as Series B Preferred Stock bearing the attributes set forth below.
RESOLVED : That 400,025 shares of preferred stock shall be designated as Series C Preferred Stock bearing the attributes set forth below.
RESOLVED : That 173,000 shares of preferred stock shall be designated as Series D Preferred Stock bearing the attributes set forth below.
RESOLVED : That the Articles of Incorporation as filed with the Florida State Department should be amended to reflect the foregoing resolutions.
RESOLVED : That the President/CEO of the Corporation is authorized to take any and all action necessary in order to reflect the change in the authorized capital of the Corporation.
NOW THEREFORE , in accordance with the foregoing resolutions, the Corporation’s Articles of Incorporation are amended as follows:
A. Increase Authorized Common Stock . Article III, Section 1 is amended by increasing the authorized capital stock from 1,050,000,000 shares to 2,550,000,000 shares; of which 2,500,000,000 shares shall be Common Stock, $.001 par value and 50,000,000 shall be preferred stock, par value $.001 per share.
B. Creation of Series A Preferred Stock . That pursuant to authority conferred upon the Board of Directors by the Articles of Incorporation of said Corporation, said Board of Directors adopt a resolution providing for the issuance of a Series of 1,000,000 shares of Series A Preferred Stock pursuant to a written consent, dated December 30 , 2013, which resolution is as follows:
Series A Preferred Stock
1. Designation, Amounts and Stated Value . The designation of this series, which consists of One Million (1,000,000) shares of Preferred Stock, is the Series A Preferred Stock (the “ Series A Preferred Stock ”). The “ Stated Value ” of the Series A Preferred Stock shall be $1 per share, being the per share value of the consideration received by the Corporation for the issuance of such shares. In the event of a liquidation or winding up of the Corporation, holders of the Series A Preferred Stock shall be entitled to receive the Stated Value per share of Series A Preferred Stock then outstanding.
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2. Dividends . The Series A Preferred Stock shall be entitled to receive 12% per annum dividends paid monthly.
3. Rank . The Series A Preferred Stock shall rank parri passu with any other series of preferred stock hereafter designated by the Corporation and not designated as senior securities or subordinate to the Series A Preferred Stock.
4. Voting Rights . On all matters to come before the shareholder of the Corporation, the holder of Series A Preferred shall have that number of votes per share (rounded to the nearest whole share) equal to the product of: (a) the number of shares of Series A Preferred held on the record date for the determination of the holders of the shares entitled to vote (the “Record Date “), or, if no Record Date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 1001. Except as otherwise expressly provided by this Amendment or by applicable law, the holders of Series A Preferred shall vote together with the holders of the outstanding shares of all other capital stock of the Corporation (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
5. Redemption and Call Rights . The Series A Preferred Stock shall not be subject to any redemption rights on behalf of the Corporation or subject to call by any holder of the Series A Preferred Stock.
6. Holder Conversion Rights . The holders of the Series A Preferred Stock shall have the following rights with respect to the conversion of the Series A Preferred Stock into shares of the Corporation’s Common Stock:
A. At any time after December 31, 2014 and upon notice provided by the holder to the Corporation, a holder shall have the right to convert, at face value per share, all or any portion of their Series A Preferred Stock into shares of the Corporation’s Common Stock on the basis of two hundred (200) shares of Common Stock for each share of Series A Preferred Stock so converted (the “Conversion Ratio”).
B. If at any time after the date of issuance of the Series A Preferred Stock, in the event the Corporation shall (i) make or issue a dividend or other distribution payable in Common Stock (other than with respect to the Series A Preferred Stock); (ii) subdivide outstanding shares of Common Stock into a larger number of shares; or (iii) combine outstanding shares of Common Stock into a smaller number of shares; or (iv) conduct a rights offering to its existing shareholders, the Conversion Ratio shall be adjusted appropriately by the Corporation’s Board of Directors.
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C. If the Common Stock issuable upon the conversion of the Series A Preferred Stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for elsewhere in this Section 6), then in each such event, the holder of each share of Series A Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Series A Preferred Stock might have been converted immediately prior to such capital reorganization, reclassification or other change.
D. In each case of an adjustment or readjustment of the conversion ratio, the Corporation, at its expense, will seek to furnish each holder of Series A Preferred Stock with a certificate, showing such adjustment or readjustment, and stating in detail the facts upon which such adjustment or readjustment is based.
E. Promptly after the Corporation’s receipt of a conversion notice, and upon surrender of the Series A Preferred Stock certificate for cancellation, the Corporation shall deliver to the holder a certificate representing the number of the Corporation’s shares of Common Stock into which such Series A Preferred Stock is converted. No fractional shares shall be issued, and, in lieu of any such fractional securities, each holder of Series A Preferred Stock who will otherwise be entitled to a fraction of a share upon surrender shall receive the next highest whole share.
7. Consolidation, Merger, Exchange, Etc . In case the Corporation shall enter into any consolidation, merger, combination, statutory share exchange or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, money and/or any other property, then in any such case the Series A Preferred Stock shall at the same time be similarly exchanged or changed into preferred shares of the surviving entity providing the holders of such preferred shares with (to the extent possible) the same relative rights and preferences as the Series A Preferred Stock.
8. Designation of Additional Series . The Board of Directors of the Corporation shall have the right to designate other shares of Preferred Stock having:
a. dividend, liquidation, or other preferences equal to, subordinate to, or superior to the rights of holders of the Series A Preferred Stock. Such preferences shall be determined in the resolutions creating such subsequent series.
9. Vote to Change the Terms of Series A Preferred Stock . The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the holders of not less than fifty percent (50%) of the then outstanding Series A Preferred Stock, shall be required for any change to the Corporation’s Articles of Incorporation which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series A Stock.
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10. Lost or Stolen Certificates . Upon receipt by the Corporation of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any Series A Preferred Stock certificates, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Corporation and, in the case of mutilation, upon surrender and cancellation of the Series A Preferred Stock certificate(s), the Corporation shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however , the Corporation shall not be obligated to re-issue preferred stock certificates if the holder contemporaneously requests the Corporation to convert such Series A Preferred Stock into Common Stock in which case such Series A Preferred Stock shall be converted pursuant to the terms of the Corporation’s Articles of Incorporation and a preferred stock certificate shall only be issued if required pursuant to the terms hereof.
11. Failure or Indulgence Not Waiver . No failure or delay on the part of a holder of Series A Preferred Stock in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
12. Status of Converted Stock . In case any shares of Series A Preferred Stock shall be converted, the shares so converted, or reacquired shall resume the status of authorized but unissued shares of Preferred Stock and shall no longer be designated as Series A Preferred Stock.
C. Creation of Series B Preferred Stock . That pursuant to authority conferred upon the Board of Directors by the Articles of Incorporation of said Corporation, said Board of Directors adopt a resolution providing for the issuance of a Series of 410,000 shares of Series B Preferred Stock pursuant to a written consent, dated December 31 , 2013, which resolution is as follows:
Series B Preferred Stock
1. Designation, Amounts and Stated Value . The designation of this series, which consists of Four Hundred Ten thousand (410,000) shares of Preferred Stock, is the Series B Preferred Stock (the “ Series B Preferred Stock ”). The “ Stated Value ” of the Series B Preferred Stock shall be $1 per share, being the per share value of the consideration received by the Corporation for the issuance of such shares. In the event of a liquidation or winding up of the Corporation, holders of the Series B Preferred Stock shall be entitled to receive the Stated Value per share of Series B Preferred Stock then outstanding.
2. Dividends . The Series B Preferred Stock shall be entitled to receive 12% per annum dividends paid monthly.
3. Rank . The Series B Preferred Stock shall rank parri passu with any other series of preferred stock hereafter designated by the Corporation and not designated as senior securities or subordinate to the Series B Preferred Stock.
4. Voting Rights . On all matters to come before the shareholder of the Corporation, the holder of Series B Preferred shall have that number of votes per share (rounded to the nearest whole share) equal to the product of (a) the number of shares of Series B Preferred Stock held on the record date for the determination of the holders of the shares entitled to vote (the “Record Date “), or, if no Record Date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 200. Except as otherwise expressly provided by this Certificate or by applicable law, the holders of Series B Preferred Stock shall vote together with the holders of the outstanding shares of all other capital stock of the Corporation (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
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5. Redemption and Call Rights . Any time after December 31, 2015, the Corporation shall have the right, but not the obligation, to redeem, out of funds legally available, all of the unconverted outstanding shares of the Series B Preferred Stock (the “Redemption”). The Company shall redeem the Series B Preferred Stock by paying in cash an amount per share equal to $1.00 (the “Redemption Price”). In the event that the Corporation elects to redeem the shares of the Series B Preferred Stock, the Corporation shall give notice of such election by delivering an executed and completed notice of Redemption (“Notice of Redemption”) to the Holder setting forth the number of shares being redeemed along with the Redemption Price. In the case of the exercise of the Redemption rights set forth herein, the Redemption privilege shall be deemed to have been exercised upon the date of receipt by the Holder of the Notice of Redemption.
6. Holder Conversion Rights . The holders of the Series B Preferred Stock shall have the following rights with respect to the conversion of the Series B Preferred Stock into shares of the Corporation’s Common Stock:
A. On December 31, 2014 and upon notice provided by the holder to the Corporation, a holder shall have the right to convert , at face value per share, all or any portion of their Series B Preferred Stock into shares of the Corporation’s Common Stock on the basis of two hundred (200) shares of Common Stock for each share of Series B Preferred Stock so converted or if the holder elects to convert on December 31, 2015, such shares shall be converted on the basis of thirty-three and one/third (33 and 1/3) shares of Common Stock for each share of Series B Preferred Stock (the “Conversion Ratio”).
B. If at any time after the date of issuance of the Series B Preferred Stock, in the event the Corporation shall (i) make or issue a dividend or other distribution payable in Common Stock (other than with respect to the Series B Preferred Stock); (ii) subdivide outstanding shares of Common Stock into a larger number of shares; or (iii) combine outstanding shares of Common Stock into a smaller number of shares; or (iv) conduct a rights offering to its existing shareholders, the Conversion Ratio shall be adjusted appropriately by the Corporation’s Board of Directors.
C. If the Common Stock issuable upon the conversion of the Series B Preferred Stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for elsewhere in this Section 6), then in each such event, the holder of each share of Series B Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Series B Preferred Stock might have been converted immediately prior to such capital reorganization, reclassification or other change.
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D. In each case of an adjustment or readjustment of the conversion ratio, the Corporation, at its expense, will seek to furnish each holder of Series B Preferred Stock with a certificate, showing such adjustment or readjustment, and stating in detail the facts upon which such adjustment or readjustment is based.
F. Promptly after the Corporation’s receipt of a conversion notice, and upon surrender of the Series B Preferred Stock certificate for cancellation, the Corporation shall deliver to the holder a certificate representing the number of the Corporation’s shares of Common Stock into which such Series B Preferred Stock is converted. No fractional shares shall be issued, and, in lieu of any such fractional securities, each holder of Series B Preferred Stock who will otherwise be entitled to a fraction of a share upon surrender shall receive the next highest whole share.
7. Consolidation, Merger, Exchange, Etc . In case the Corporation shall enter into any consolidation, merger, combination, statutory share exchange or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, money and/or any other property, then in any such case the Series B Preferred Stock shall at the same time be similarly exchanged or changed into preferred shares of the surviving entity providing the holders of such preferred shares with (to the extent possible) the same relative rights and preferences as the Series B Preferred Stock.
8. Designation of Additional Series . The Board of Directors of the Corporation shall have the right to designate other shares of Preferred Stock having:
a. dividend, liquidation, or other preferences equal to, subordinate to, or superior to the rights of holders of the Series B Preferred Stock. Such preferences shall be determined in the resolutions creating such subsequent series.
9. Vote to Change the Terms of Series B Preferred Stock . The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the holders of not less than fifty percent (50%) of the then outstanding Series B Preferred Stock, shall be required for any change to the Corporation’s Articles of Incorporation which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series B Stock.
10. Lost or Stolen Certificates . Upon receipt by the Corporation of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any Series B Preferred Stock certificates, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Corporation and, in the case of mutilation, upon surrender and cancellation of the Series B Preferred Stock certificate(s), the Corporation shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however , the Corporation shall not be obligated to re-issue preferred stock certificates if the holder contemporaneously requests the Corporation to convert such Series B Preferred Stock into Common Stock in which case such Series B Preferred Stock shall be converted pursuant to the terms of the Corporation’s Articles of Incorporation and a preferred stock certificate shall only be issued if required pursuant to the terms hereof.
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11. Failure or Indulgence Not Waiver . No failure or delay on the part of a holder of Series A Preferred Stock in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
12. Status of Converted Stock . In case any shares of Series B Preferred Stock shall be converted, the shares so converted, or reacquired shall resume the status of authorized but unissued shares of Preferred Stock and shall no longer be designated as Series B Preferred Stock.
D. Creation of Series C Preferred Stock. That pursuant to authority conferred upon the Board of Directors by the Articles of Incorporation of said Corporation, said Board of Directors adopt a resolution providing for the issuance of a Series of 400,025 shares of Series C Preferred Stock pursuant to a written consent, dated December 30 , 2013, which resolution is as follows:
Series C Preferred Stock
1. Designation, Amounts and Stated Value . The designation of this series, which consists of Four Hundred Thousand Twenty-Five (400,025) shares of Preferred Stock, is the Series C Preferred Stock (the “ Series C Preferred Stock ”). The “ Stated Value ” of the Series C Preferred Stock shall be $1 per share, being the per share value of the consideration received by the Corporation for the issuance of such shares. In the event of a liquidation or winding up of the Corporation, holders of the Series C Preferred Stock shall be entitled to receive the Stated Value per share of Series C Preferred Stock then outstanding.
2. Dividends . The Series C Preferred Stock shall be entitled to receive 12% per annum dividends paid monthly.
3. Rank . The Series C Preferred Stock shall rank parri passu with any other series of preferred stock hereafter designated by the Corporation and not designated as senior securities or subordinate to the Series C Preferred Stock.
4. Voting Rights . On all matters to come before the shareholder of the Corporation, the holder of Series C Preferred shall have that number of votes per share (rounded to the nearest whole share) equal to the product of (a) the number of shares of Series C Preferred held on the record date for the determination of the holders of the shares entitled to vote (the “Record Date “), or, if no Record Date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 100. Except as otherwise expressly provided by this Certificate or by applicable law, the holders of Series C Preferred shall vote together with the holders of the outstanding shares of all other capital stock of the Corporation (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
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5. Redemption and Call Rights . Any time after December 31, 2015, the Corporation shall have the right, but not the obligation, to redeem, out of funds legally available, all of the unconverted outstanding shares of the Series C Preferred Stock (the “Redemption”). The Company shall redeem the Series C Preferred Stock by paying in cash an amount per share equal to $1.00 (the “Redemption Price”). In the event that the Corporation elects to redeem the shares of the Series C Preferred Stock, the Corporation shall give notice of such election by delivering an executed and completed notice of Redemption (“Notice of Redemption”) to the Holder setting forth the number of shares being redeemed along with the Redemption Price. In the case of the exercise of the Redemption rights set forth herein, the Redemption privilege shall be deemed to have been exercised upon the date of receipt by the Holder of the Notice of Redemption.
6. Holder Conversion Rights . The holders of the Series C Preferred Stock shall have the following rights with respect to the conversion of the Series C Preferred Stock into shares of the Corporation’s Common Stock:
A. On December 31, 2014 and upon notice provided by the holder to the Corporation, a holder shall have the right to convert , at face value per share, all or any portion of their Series C Preferred Stock into shares of the Corporation’s Common Stock on the basis of one hundred (100) shares of Common Stock for each share of Series C Preferred Stock so converted or if the holder elects to convert on December 31, 2015, such shares shall be converted on the basis of twenty-eight and 5714/10,000 (28.5714) shares of Common Stock for each share of Series C Preferred Stock (the “Conversion Ratio”).
B. If at any time after the date of issuance of the Series C Preferred Stock, in the event the Corporation shall (i) make or issue a dividend or other distribution payable in Common Stock (other than with respect to the Series C Preferred Stock); (ii) subdivide outstanding shares of Common Stock into a larger number of shares; or (iii) combine outstanding shares of Common Stock into a smaller number of shares; or (iv) conduct a rights offering to its existing shareholders, the Conversion Ratio shall be adjusted appropriately by the Corporation’s Board of Directors.
C. If the Common Stock issuable upon the conversion of the Series C Preferred Stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for elsewhere in this Section 6), then in each such event, the holder of each share of Series C Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Series C Preferred Stock might have been converted immediately prior to such capital reorganization, reclassification or other change.
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D. In each case of an adjustment or readjustment of the conversion ratio, the Corporation, at its expense, will seek to furnish each holder of Series C Preferred Stock with a certificate, showing such adjustment or readjustment, and stating in detail the facts upon which such adjustment or readjustment is based.
E. Promptly after the Corporation’s receipt of a conversion notice, and upon surrender of the Series C Preferred Stock certificate for cancellation, the Corporation shall deliver to the holder a certificate representing the number of the Corporation’s shares of Common Stock into which such Series C Preferred Stock is converted. No fractional shares shall be issued, and, in lieu of any such fractional securities, each holder of Series C Preferred Stock who will otherwise be entitled to a fraction of a share upon surrender shall receive the next highest whole share.
7. Consolidation, Merger, Exchange, Etc . In case the Corporation shall enter into any consolidation, merger, combination, statutory share exchange or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, money and/or any other property, then in any such case the Series C Preferred Stock shall at the same time be similarly exchanged or changed into preferred shares of the surviving entity providing the holders of such preferred shares with (to the extent possible) the same relative rights and preferences as the Series C Preferred Stock.
8. Designation of Additional Series . The Board of Directors of the Corporation shall have the right to designate other shares of Preferred Stock having:
a. dividend, liquidation, or other preferences equal to, subordinate to, or superior to the rights of holders of the Series C Preferred Stock. Such preferences shall be determined in the resolutions creating such subsequent series.
9. Vote to Change the Terms of Series C Preferred Stock . The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the holders of not less than fifty percent (50%) of the then outstanding Series C Preferred Stock, shall be required for any change to the Corporation’s Articles of Incorporation which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series C Stock.
10. Lost or Stolen Certificates . Upon receipt by the Corporation of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any Series C Preferred Stock certificates, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Corporation and, in the case of mutilation, upon surrender and cancellation of the Series C Preferred Stock certificate(s), the Corporation shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however , the Corporation shall not be obligated to re-issue preferred stock certificates if the holder contemporaneously requests the Corporation to convert such Series C Preferred Stock into Common Stock in which case such Series C Preferred Stock shall be converted pursuant to the terms of the Corporation’s Articles of Incorporation and a preferred stock certificate shall only be issued if required pursuant to the terms hereof.
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11. Failure or Indulgence Not Waiver . No failure or delay on the part of a holder of Series A Preferred Stock in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
12. Status of Converted Stock . In case any shares of Series C Preferred Stock shall be converted, the shares so converted, or reacquired shall resume the status of authorized but unissued shares of Preferred Stock and shall no longer be designated as Series C Preferred Stock.
E. Creation of Series D Preferred Stock. That pursuant to authority conferred upon the Board of Directors by the Articles of Incorporation of said Corporation, said Board of Directors adopt a resolution providing for the issuance of a Series of 173,000 shares of Series D Preferred Stock pursuant to a written consent, dated December 30, 2013, which resolution is as follows:
Series D Preferred Stock
1. Designation, Amounts and Stated Value . The designation of this series, which consists of One Hundred Seventy Three Thousand (173,000) shares of Preferred Stock, is the Series D Preferred Stock (the “ Series D Preferred Stock ”). The “ Stated Value ” of the Series D Preferred Stock shall be $1 per share, being the per share value of the consideration received by the Corporation for the issuance of such shares. In the event of a liquidation or winding up of the Corporation, holders of the Series D Preferred Stock shall be entitled to receive the Stated Value per share of Series D Preferred Stock then outstanding.
2. Dividends . The Series D Preferred Stock shall be entitled to receive 12% per annum dividends paid monthly.
3. Rank . The Series D Preferred Stock shall rank parri passu with any other series of preferred stock hereafter designated by the Corporation and not designated as senior securities or subordinate to the Series D Preferred Stock.
4. Voting Rights . On all matters to come before the shareholder of the Corporation, the holder of Series D Preferred shall have that number of votes per share (rounded to the nearest whole share) equal to the product of (a) the number of shares of Series D Preferred held on the record date for the determination of the holders of the shares entitled to vote (the “Record Date “), or, if no Record Date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 67. Except as otherwise expressly provided by this Certificate or by applicable law, the holders of Series D Preferred shall vote together with the holders of the outstanding shares of all other capital stock of the Corporation (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
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5. Redemption and Call Rights . Any time after December 31, 2015, the Corporation shall have the right, but not the obligation, to redeem, out of funds legally available, all of the unconverted outstanding shares of the Series D Preferred Stock (the “Redemption”). The Company shall redeem the Series D Preferred Stock by paying in cash an amount per share equal to $1.00 (the “Redemption Price”). In the event that the Corporation elects to redeem the shares of the Series D Preferred Stock, the Corporation shall give notice of such election by delivering an executed and completed notice of Redemption (“Notice of Redemption”) to the Holder setting forth the number of shares being redeemed along with the Redemption Price. In the case of the exercise of the Redemption rights set forth herein, the Redemption privilege shall be deemed to have been exercised upon the date of receipt by the Holder of the Notice of Redemption.
6. Holder Conversion Rights . The holders of the Series D Preferred Stock shall have the following rights with respect to the conversion of the Series D Preferred Stock into shares of the Corporation’s Common Stock:
A. On December 31, 2014 and upon notice provided by the holder to the Corporation, a holder shall have the right to convert , at face value per share, all or any portion of their Series D Preferred Stock into shares of the Corporation’s Common Stock on the basis of sixty-six and 6,666/10,000 (66.6666) shares of Common Stock for each share of Series D Preferred Stock so converted or if the holder elects to convert on December 31, 2015, such shares shall be converted on the basis of twenty-five (25) shares of Common Stock for each share of Series D Preferred Stock (the “Conversion Ratio”).
B. If at any time after the date of issuance of the Series D Preferred Stock, in the event the Corporation shall (i) make or issue a dividend or other distribution payable in Common Stock (other than with respect to the Series D Preferred Stock); (ii) subdivide outstanding shares of Common Stock into a larger number of shares; or (iii) combine outstanding shares of Common Stock into a smaller number of shares; or (iv) conduct a rights offering to its existing shareholders, the Conversion Ratio shall be adjusted appropriately by the Corporation’s Board of Directors.
C. If the Common Stock issuable upon the conversion of the Series D Preferred Stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for elsewhere in this Section 6), then in each such event, the holder of each share of Series D Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Series D Preferred Stock might have been converted immediately prior to such capital reorganization, reclassification or other change.
D. In each case of an adjustment or readjustment of the conversion ratio, the Corporation, at its expense, will seek to furnish each holder of Series D Preferred Stock with a certificate, showing such adjustment or readjustment, and stating in detail the facts upon which such adjustment or readjustment is based.
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E. Promptly after the Corporation’s receipt of a conversion notice, and upon surrender of the Series D Preferred Stock certificate for cancellation, the Corporation shall deliver to the holder a certificate representing the number of the Corporation’s shares of Common Stock into which such Series D Preferred Stock is converted. No fractional shares shall be issued, and, in lieu of any such fractional securities, each holder of Series D Preferred Stock who will otherwise be entitled to a fraction of a share upon surrender shall receive the next highest whole share.
7. Consolidation, Merger, Exchange, Etc . In case the Corporation shall enter into any consolidation, merger, combination, statutory share exchange or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, money and/or any other property, then in any such case the Series D Preferred Stock shall at the same time be similarly exchanged or changed into preferred shares of the surviving entity providing the holders of such preferred shares with (to the extent possible) the same relative rights and preferences as the Series D Preferred Stock.
8. Designation of Additional Series . The Board of Directors of the Corporation shall have the right to designate other shares of Preferred Stock having:
a. dividend, liquidation, or other preferences equal to, subordinate to, or superior to the rights of holders of the Series D Preferred Stock. Such preferences shall be determined in the resolutions creating such subsequent series.
9. Vote to Change the Terms of Series D Preferred Stock . The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the holders of not less than fifty percent (50%) of the then outstanding Series D Preferred Stock, shall be required for any change to the Corporation’s Articles of Incorporation which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series D Stock.
10. Lost or Stolen Certificates . Upon receipt by the Corporation of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any Series D Preferred Stock certificates, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Corporation and, in the case of mutilation, upon surrender and cancellation of the Series D Preferred Stock certificate(s), the Corporation shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however , the Corporation shall not be obligated to re-issue preferred stock certificates if the holder contemporaneously requests the Corporation to convert such Series D Preferred Stock into Common Stock in which case such Series D Preferred Stock shall be converted pursuant to the terms of the Corporation’s Articles of Incorporation and a preferred stock certificate shall only be issued if required pursuant to the terms hereof.
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11. Failure or Indulgence Not Waiver . No failure or delay on the part of a holder of Series A Preferred Stock in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
12. Status of Converted Stock . In case any shares of Series D Preferred Stock shall be converted, the shares so converted, or reacquired shall resume the status of authorized but unissued shares of Preferred Stock and shall no longer be designated as Series D Preferred Stock.
F. Authority to Amend . These Articles of Amendment were adopted by the unanimous consent of the Corporation’s Board of Directors on December 30, 2013 and duly approved by the shareholders as required by law and the Articles of Incorporation of the Corporation.
IN WITNESS WHEREOF , the undersigned, being the Chief Executive Officer of this Corporation, has executed these Articles of Amendment as of December 30, 2013.
IEG HOLDINGS CORPORATION | ||
By: | /s/ Paul Mathieson | |
Paul Mathieson, President and Chief Executive Officer |
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EXHIBIT A
IEG HOLDINGS CORPORATION
CONVERSION NOTICE
Fax: |
IEG HOLDINGS CORPORATION
Reference is made to the Certificate of Designations, Preferences and Rights of Series Preferred Stock of IEG HOLDINGS CORPORATION (the “Certificate of Designations”). In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the number of shares of Series Preferred Stock (the “Preferred Shares”), of IEG HOLDINGS CORPORATION indicated below into shares of Common Stock (the “Common Stock”), of the Company, as of the date specified below.
Date of Conversion: |
Number of Preferred Shares to be converted: |
Stock certificate no(s). of Preferred Shares to be converted: |
Tax ID Number (If applicable): |
Please confirm the following information:
Conversion Price: |
Number of shares of Common Stock to be issued: |
Please issue the Common Stock into which the Preferred Shares are being converted in the following name and to the following address:
Issue to: | ||
Address: |
Telephone Number: |
Facsimile Number: |
Authorization: |
By: | ||
Title: | ||
Dated: |
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ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
OF
IEG HOLDINGS CORPORATION
Pursuant to Section 607.1006 of the Business Corporation Act of the State of Florida, the undersigned, being the Chief Executive Officer of IEG HOLDINGS CORPORATION, a Florida corporation (the “ Corporation ”), does hereby certify that the following resolutions and amendments (the “Amendment”) were adopted by the Board of Directors and the shareholders of the Corporation.
RESOLVED : That 1,000,000 shares of preferred stock shall be replaced as Series A Preferred Stock bearing the attributes set forth below.
RESOLVED : That 410,000 shares of preferred stock shall be replaced as Series B Preferred Stock bearing the attributes set forth below.
RESOLVED : That 400,025 shares of preferred stock shall be replaced as Series C Preferred Stock bearing the attributes set forth below.
RESOLVED : That 173,000 shares of preferred stock shall be replaced as Series D Preferred Stock bearing the attributes set forth below.
RESOLVED : That 461,000 shares of preferred stock shall be designated as Series E Preferred Stock bearing the attributes set forth below.
RESOLVED : That 1,500,000 shares of preferred stock shall be designated as Series F Preferred Stock bearing the attributes set forth below.
RESOLVED : That the Articles of Incorporation as filed with the Florida State Department should be amended to reflect the foregoing resolutions.
RESOLVED : That the President/CEO of the Corporation is authorized to take any and all action necessary in order to reflect the change in the authorized capital of the Corporation.
NOW THEREFORE , in accordance with the foregoing resolutions, the Corporation’s Articles of Incorporation are amended as follows:
A. Replacement of Series A Preferred Stock Terms . That pursuant to authority conferred upon the Board of Directors by the Articles of Incorporation of said Corporation, said Board of Directors adopt a resolution providing for the replacement of the Series of 1,000,000 shares of Series A Preferred Stock terms pursuant to a written consent, dated September 25, 2014, which resolution is as follows:
Series A Preferred Stock
1. Designation, Amounts and Stated Value . The designation of this series, which consists of One Million (1,000,000) shares of Preferred Stock, is the Series A Preferred Stock (the “ Series A Preferred Stock ”). The “ Stated Value ” of the Series A Preferred Stock shall be $1 per share, being the per share value of the consideration received by the Corporation for the issuance of such shares. In the event of a liquidation or winding up of the Corporation, holders of the Series A Preferred Stock shall be entitled to receive the Stated Value per share of Series A Preferred Stock then outstanding.
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2. Dividends . The Series A Preferred Stock shall be entitled to receive 12% per annum dividends paid monthly.
3. Rank . The Series A Preferred Stock shall rank parri passu with any other series of preferred stock hereafter designated by the Corporation and not designated as senior securities or subordinate to the Series A Preferred Stock.
4. Voting Rights . On all matters to come before the shareholder of the Corporation, the holder of Series A Preferred shall have that number of votes per share (rounded to the nearest whole share) equal to the product of: (a) the number of shares of Series A Preferred held on the record date for the determination of the holders of the shares entitled to vote (the “Record Date “), or, if no Record Date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 1001. Except as otherwise expressly provided by this Amendment or by applicable law, the holders of Series A Preferred shall vote together with the holders of the outstanding shares of all other capital stock of the Corporation (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
5. Redemption and Call Rights . The Series A Preferred Stock shall not be subject to any redemption rights on behalf of the Corporation or subject to call by any holder of the Series A Preferred Stock.
6. Holder Conversion Rights . The holders of the Series A Preferred Stock shall have the following rights with respect to the conversion of the Series A Preferred Stock into shares of the Corporation’s Common Stock:
A. At any time after December 31, 2014 and upon notice provided by the holder to the Corporation, a holder shall have the right to convert, at face value per share, all or any portion of their Series A Preferred Stock into shares of the Corporation’s Common Stock on the basis of four hundred (400) shares of Common Stock for each share of Series A Preferred Stock so converted (the “Conversion Ratio”).
B. If at any time after the date of issuance of the Series A Preferred Stock, in the event the Corporation shall (i) make or issue a dividend or other distribution payable in Common Stock (other than with respect to the Series A Preferred Stock); (ii) subdivide outstanding shares of Common Stock into a larger number of shares; or (iii) combine outstanding shares of Common Stock into a smaller number of shares; or (iv) conduct a rights offering to its existing shareholders, the Conversion Ratio shall be adjusted appropriately by the Corporation’s Board of Directors.
C. If the Common Stock issuable upon the conversion of the Series A Preferred Stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for elsewhere in this Section 6), then in each such event, the holder of each share of Series A Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Series A Preferred Stock might have been converted immediately prior to such capital reorganization, reclassification or other change.
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D. In each case of an adjustment or readjustment of the conversion ratio, the Corporation, at its expense, will seek to furnish each holder of Series A Preferred Stock with a certificate, showing such adjustment or readjustment, and stating in detail the facts upon which such adjustment or readjustment is based.
E. Promptly after the Corporation’s receipt of a conversion notice, and upon surrender of the Series A Preferred Stock certificate for cancellation, the Corporation shall deliver to the holder a certificate representing the number of the Corporation’s shares of Common Stock into which such Series A Preferred Stock is converted. No fractional shares shall be issued, and, in lieu of any such fractional securities, each holder of Series A Preferred Stock who will otherwise be entitled to a fraction of a share upon surrender shall receive the next highest whole share.
7. Consolidation, Merger, Exchange, Etc . In case the Corporation shall enter into any consolidation, merger, combination, statutory share exchange or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, money and/or any other property, then in any such case the Series A Preferred Stock shall at the same time be similarly exchanged or changed into preferred shares of the surviving entity providing the holders of such preferred shares with (to the extent possible) the same relative rights and preferences as the Series A Preferred Stock.
8. Designation of Additional Series . The Board of Directors of the Corporation shall have the right to designate other shares of Preferred Stock having:
a. dividend, liquidation, or other preferences equal to, subordinate to, or superior to the rights of holders of the Series A Preferred Stock. Such preferences shall be determined in the resolutions creating such subsequent series.
9. Vote to Change the Terms of Series A Preferred Stock . The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the holders of not less than fifty percent (50%) of the then outstanding Series A Preferred Stock, shall be required for any change to the Corporation’s Articles of Incorporation which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series A Stock.
10. Lost or Stolen Certificates . Upon receipt by the Corporation of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any Series A Preferred Stock certificates, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Corporation and, in the case of mutilation, upon surrender and cancellation of the Series A Preferred Stock certificate(s), the Corporation shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however , the Corporation shall not be obligated to re-issue preferred stock certificates if the holder contemporaneously requests the Corporation to convert such Series A Preferred Stock into Common Stock in which case such Series A Preferred Stock shall be converted pursuant to the terms of the Corporation’s Articles of Incorporation and a preferred stock certificate shall only be issued if required pursuant to the terms hereof.
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11. Failure or Indulgence Not Waiver . No failure or delay on the part of a holder of Series A Preferred Stock in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
12. Status of Converted Stock . In case any shares of Series A Preferred Stock shall be converted, the shares so converted, or reacquired shall resume the status of authorized but unissued shares of Preferred Stock and shall no longer be designated as Series A Preferred Stock.
B. Replacement of Series B Preferred Stock Terms . That pursuant to authority conferred upon the Board of Directors by the Articles of Incorporation of said Corporation, said Board of Directors adopt a resolution providing for the replacement of a Series of 410,000 shares of Series B Preferred Stock terms pursuant to a written consent, dated September 25, 2014, which resolution is as follows:
Series B Preferred Stock
1. Designation, Amounts and Stated Value . The designation of this series, which consists of Four Hundred Ten thousand (410,000) shares of Preferred Stock, is the Series B Preferred Stock (the “ Series B Preferred Stock ”). The “ Stated Value ” of the Series B Preferred Stock shall be $1 per share, being the per share value of the consideration received by the Corporation for the issuance of such shares. In the event of a liquidation or winding up of the Corporation, holders of the Series B Preferred Stock shall be entitled to receive the Stated Value per share of Series B Preferred Stock then outstanding.
2. Dividends . The Series B Preferred Stock shall be entitled to receive 12% per annum dividends paid monthly.
3. Rank . The Series B Preferred Stock shall rank parri passu with any other series of preferred stock hereafter designated by the Corporation and not designated as senior securities or subordinate to the Series B Preferred Stock.
4. Voting Rights . On all matters to come before the shareholder of the Corporation, the holder of Series B Preferred shall have that number of votes per share (rounded to the nearest whole share) equal to the product of (a) the number of shares of Series B Preferred Stock held on the record date for the determination of the holders of the shares entitled to vote (the “Record Date “), or, if no Record Date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 200. Except as otherwise expressly provided by this Certificate or by applicable law, the holders of Series B Preferred Stock shall vote together with the holders of the outstanding shares of all other capital stock of the Corporation (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
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5. Redemption and Call Rights . Any time after December 31, 2015, the Corporation shall have the right, but not the obligation, to redeem, out of funds legally available, all of the unconverted outstanding shares of the Series B Preferred Stock (the “Redemption”). The Company shall redeem the Series B Preferred Stock by paying in cash an amount per share equal to $1.00 (the “Redemption Price”). In the event that the Corporation elects to redeem the shares of the Series B Preferred Stock, the Corporation shall give notice of such election by delivering an executed and completed notice of Redemption (“Notice of Redemption”) to the Holder setting forth the number of shares being redeemed along with the Redemption Price. In the case of the exercise of the Redemption rights set forth herein, the Redemption privilege shall be deemed to have been exercised upon the date of receipt by the Holder of the Notice of Redemption.
6. Holder Conversion Rights . The holders of the Series B Preferred Stock shall have the following rights with respect to the conversion of the Series B Preferred Stock into shares of the Corporation’s Common Stock:
A. On December 31, 2014 and upon notice provided by the holder to the Corporation, a holder shall have the right to convert , at face value per share, all or any portion of their Series B Preferred Stock into shares of the Corporation’s Common Stock on the basis of four hundred (400) shares of Common Stock for each share of Series B Preferred Stock so converted or if the holder elects to convert on December 31, 2015, such shares shall be converted on the basis of sixty-six and two/thirds (66 and 2/3) shares of Common Stock for each share of Series B Preferred Stock (the “Conversion Ratio”).
B. If at any time after the date of issuance of the Series B Preferred Stock, in the event the Corporation shall (i) make or issue a dividend or other distribution payable in Common Stock (other than with respect to the Series B Preferred Stock); (ii) subdivide outstanding shares of Common Stock into a larger number of shares; or (iii) combine outstanding shares of Common Stock into a smaller number of shares; or (iv) conduct a rights offering to its existing shareholders, the Conversion Ratio shall be adjusted appropriately by the Corporation’s Board of Directors.
C. If the Common Stock issuable upon the conversion of the Series B Preferred Stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for elsewhere in this Section 6), then in each such event, the holder of each share of Series B Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Series B Preferred Stock might have been converted immediately prior to such capital reorganization, reclassification or other change.
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D. In each case of an adjustment or readjustment of the conversion ratio, the Corporation, at its expense, will seek to furnish each holder of Series B Preferred Stock with a certificate, showing such adjustment or readjustment, and stating in detail the facts upon which such adjustment or readjustment is based.
E . Promptly after the Corporation’s receipt of a conversion notice, and upon surrender of the Series B Preferred Stock certificate for cancellation, the Corporation shall deliver to the holder a certificate representing the number of the Corporation’s shares of Common Stock into which such Series B Preferred Stock is converted. No fractional shares shall be issued, and, in lieu of any such fractional securities, each holder of Series B Preferred Stock who will otherwise be entitled to a fraction of a share upon surrender shall receive the next highest whole share.
7. Consolidation, Merger, Exchange, Etc . In case the Corporation shall enter into any consolidation, merger, combination, statutory share exchange or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, money and/or any other property, then in any such case the Series B Preferred Stock shall at the same time be similarly exchanged or changed into preferred shares of the surviving entity providing the holders of such preferred shares with (to the extent possible) the same relative rights and preferences as the Series B Preferred Stock.
8. Designation of Additional Series . The Board of Directors of the Corporation shall have the right to designate other shares of Preferred Stock having:
a. dividend, liquidation, or other preferences equal to, subordinate to, or superior to the rights of holders of the Series B Preferred Stock. Such preferences shall be determined in the resolutions creating such subsequent series.
9. Vote to Change the Terms of Series B Preferred Stock . The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the holders of not less than fifty percent (50%) of the then outstanding Series B Preferred Stock, shall be required for any change to the Corporation’s Articles of Incorporation which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series B Stock.
10. Lost or Stolen Certificates . Upon receipt by the Corporation of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any Series B Preferred Stock certificates, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Corporation and, in the case of mutilation, upon surrender and cancellation of the Series B Preferred Stock certificate(s), the Corporation shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however , the Corporation shall not be obligated to re-issue preferred stock certificates if the holder contemporaneously requests the Corporation to convert such Series B Preferred Stock into Common Stock in which case such Series B Preferred Stock shall be converted pursuant to the terms of the Corporation’s Articles of Incorporation and a preferred stock certificate shall only be issued if required pursuant to the terms hereof.
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11. Failure or Indulgence Not Waiver . No failure or delay on the part of a holder of Series B Preferred Stock in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
12. Status of Converted Stock . In case any shares of Series B Preferred Stock shall be converted, the shares so converted, or reacquired shall resume the status of authorized but unissued shares of Preferred Stock and shall no longer be designated as Series B Preferred Stock.
C. Replacement of Series C Preferred Stock Terms. That pursuant to authority conferred upon the Board of Directors by the Articles of Incorporation of said Corporation, said Board of Directors adopt a resolution providing for the replacement of a Series of 400,025 shares of Series C Preferred Stock terms pursuant to a written consent, dated September 25, 2014, which resolution is as follows:
Series C Preferred Stock
1. Designation, Amounts and Stated Value . The designation of this series, which consists of Four Hundred Thousand Twenty-Five (400,025) shares of Preferred Stock, is the Series C Preferred Stock (the “ Series C Preferred Stock ”). The “ Stated Value ” of the Series C Preferred Stock shall be $1 per share, being the per share value of the consideration received by the Corporation for the issuance of such shares. In the event of a liquidation or winding up of the Corporation, holders of the Series C Preferred Stock shall be entitled to receive the Stated Value per share of Series C Preferred Stock then outstanding.
2. Dividends . The Series C Preferred Stock shall be entitled to receive 12% per annum dividends paid monthly.
3. Rank . The Series C Preferred Stock shall rank parri passu with any other series of preferred stock hereafter designated by the Corporation and not designated as senior securities or subordinate to the Series C Preferred Stock.
4. Voting Rights . On all matters to come before the shareholder of the Corporation, the holder of Series C Preferred shall have that number of votes per share (rounded to the nearest whole share) equal to the product of (a) the number of shares of Series C Preferred held on the record date for the determination of the holders of the shares entitled to vote (the “Record Date “), or, if no Record Date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 100. Except as otherwise expressly provided by this Certificate or by applicable law, the holders of Series C Preferred shall vote together with the holders of the outstanding shares of all other capital stock of the Corporation (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
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5. Redemption and Call Rights . Any time after December 31, 2015, the Corporation shall have the right, but not the obligation, to redeem, out of funds legally available, all of the unconverted outstanding shares of the Series C Preferred Stock (the “Redemption”). The Company shall redeem the Series C Preferred Stock by paying in cash an amount per share equal to $1.00 (the “Redemption Price”). In the event that the Corporation elects to redeem the shares of the Series C Preferred Stock, the Corporation shall give notice of such election by delivering an executed and completed notice of Redemption (“Notice of Redemption”) to the Holder setting forth the number of shares being redeemed along with the Redemption Price. In the case of the exercise of the Redemption rights set forth herein, the Redemption privilege shall be deemed to have been exercised upon the date of receipt by the Holder of the Notice of Redemption.
6. Holder Conversion Rights . The holders of the Series C Preferred Stock shall have the following rights with respect to the conversion of the Series C Preferred Stock into shares of the Corporation’s Common Stock:
A. On December 31, 2014 and upon notice provided by the holder to the Corporation, a holder shall have the right to convert , at face value per share, all or any portion of their Series C Preferred Stock into shares of the Corporation’s Common Stock on the basis of two hundred (200) shares of Common Stock for each share of Series C Preferred Stock so converted or if the holder elects to convert on December 31, 2015, such shares shall be converted on the basis of fifty-seven and 1428/10,000 (57.1428) shares of Common Stock for each share of Series C Preferred Stock (the “Conversion Ratio”).
B. If at any time after the date of issuance of the Series C Preferred Stock, in the event the Corporation shall (i) make or issue a dividend or other distribution payable in Common Stock (other than with respect to the Series C Preferred Stock); (ii) subdivide outstanding shares of Common Stock into a larger number of shares; or (iii) combine outstanding shares of Common Stock into a smaller number of shares; or (iv) conduct a rights offering to its existing shareholders, the Conversion Ratio shall be adjusted appropriately by the Corporation’s Board of Directors.
C. If the Common Stock issuable upon the conversion of the Series C Preferred Stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for elsewhere in this Section 6), then in each such event, the holder of each share of Series C Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Series C Preferred Stock might have been converted immediately prior to such capital reorganization, reclassification or other change.
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D. In each case of an adjustment or readjustment of the conversion ratio, the Corporation, at its expense, will seek to furnish each holder of Series C Preferred Stock with a certificate, showing such adjustment or readjustment, and stating in detail the facts upon which such adjustment or readjustment is based.
E . Promptly after the Corporation’s receipt of a conversion notice, and upon surrender of the Series C Preferred Stock certificate for cancellation, the Corporation shall deliver to the holder a certificate representing the number of the Corporation’s shares of Common Stock into which such Series C Preferred Stock is converted. No fractional shares shall be issued, and, in lieu of any such fractional securities, each holder of Series C Preferred Stock who will otherwise be entitled to a fraction of a share upon surrender shall receive the next highest whole share.
7. Consolidation, Merger, Exchange, Etc . In case the Corporation shall enter into any consolidation, merger, combination, statutory share exchange or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, money and/or any other property, then in any such case the Series C Preferred Stock shall at the same time be similarly exchanged or changed into preferred shares of the surviving entity providing the holders of such preferred shares with (to the extent possible) the same relative rights and preferences as the Series C Preferred Stock.
8. Designation of Additional Series . The Board of Directors of the Corporation shall have the right to designate other shares of Preferred Stock having:
a. dividend, liquidation, or other preferences equal to, subordinate to, or superior to the rights of holders of the Series C Preferred Stock. Such preferences shall be determined in the resolutions creating such subsequent series.
9. Vote to Change the Terms of Series C Preferred Stock . The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the holders of not less than fifty percent (50%) of the then outstanding Series C Preferred Stock, shall be required for any change to the Corporation’s Articles of Incorporation which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series C Stock.
10. Lost or Stolen Certificates . Upon receipt by the Corporation of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any Series C Preferred Stock certificates, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Corporation and, in the case of mutilation, upon surrender and cancellation of the Series C Preferred Stock certificate(s), the Corporation shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however , the Corporation shall not be obligated to re-issue preferred stock certificates if the holder contemporaneously requests the Corporation to convert such Series C Preferred Stock into Common Stock in which case such Series C Preferred Stock shall be converted pursuant to the terms of the Corporation’s Articles of Incorporation and a preferred stock certificate shall only be issued if required pursuant to the terms hereof.
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11. Failure or Indulgence Not Waiver . No failure or delay on the part of a holder of Series C Preferred Stock in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
12. Status of Converted Stock . In case any shares of Series C Preferred Stock shall be converted, the shares so converted, or reacquired shall resume the status of authorized but unissued shares of Preferred Stock and shall no longer be designated as Series C Preferred Stock.
D. Replacement of Series D Preferred Stock Terms. That pursuant to authority conferred upon the Board of Directors by the Articles of Incorporation of said Corporation, said Board of Directors adopt a resolution providing for the replacement of a Series of 173,000 shares of Series D Preferred Stock terms pursuant to a written consent, dated September 25, 2014, which resolution is as follows:
Series D Preferred Stock
1. Designation, Amounts and Stated Value . The designation of this series, which consists of One Hundred Seventy Three Thousand (173,000) shares of Preferred Stock, is the Series D Preferred Stock (the “ Series D Preferred Stock ”). The “ Stated Value ” of the Series D Preferred Stock shall be $1 per share, being the per share value of the consideration received by the Corporation for the issuance of such shares. In the event of a liquidation or winding up of the Corporation, holders of the Series D Preferred Stock shall be entitled to receive the Stated Value per share of Series D Preferred Stock then outstanding.
2. Dividends . The Series D Preferred Stock shall be entitled to receive 12% per annum dividends paid monthly.
3. Rank . The Series D Preferred Stock shall rank parri passu with any other series of preferred stock hereafter designated by the Corporation and not designated as senior securities or subordinate to the Series D Preferred Stock.
4. Voting Rights . On all matters to come before the shareholder of the Corporation, the holder of Series D Preferred shall have that number of votes per share (rounded to the nearest whole share) equal to the product of (a) the number of shares of Series D Preferred held on the record date for the determination of the holders of the shares entitled to vote (the “Record Date “), or, if no Record Date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 67. Except as otherwise expressly provided by this Certificate or by applicable law, the holders of Series D Preferred shall vote together with the holders of the outstanding shares of all other capital stock of the Corporation (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
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5. Redemption and Call Rights . Any time after December 31, 2015, the Corporation shall have the right, but not the obligation, to redeem, out of funds legally available, all of the unconverted outstanding shares of the Series D Preferred Stock (the “Redemption”). The Company shall redeem the Series D Preferred Stock by paying in cash an amount per share equal to $1.00 (the “Redemption Price”). In the event that the Corporation elects to redeem the shares of the Series D Preferred Stock, the Corporation shall give notice of such election by delivering an executed and completed notice of Redemption (“Notice of Redemption”) to the Holder setting forth the number of shares being redeemed along with the Redemption Price. In the case of the exercise of the Redemption rights set forth herein, the Redemption privilege shall be deemed to have been exercised upon the date of receipt by the Holder of the Notice of Redemption.
6. Holder Conversion Rights . The holders of the Series D Preferred Stock shall have the following rights with respect to the conversion of the Series D Preferred Stock into shares of the Corporation’s Common Stock:
A. On December 31, 2014 and upon notice provided by the holder to the Corporation, a holder shall have the right to convert , at face value per share, all or any portion of their Series D Preferred Stock into shares of the Corporation’s Common Stock on the basis of one hundred and thirty-three and 3,333/10,000 (133.3333) shares of Common Stock for each share of Series D Preferred Stock so converted or if the holder elects to convert on December 31, 2015, such shares shall be converted on the basis of fifty (50) shares of Common Stock for each share of Series D Preferred Stock (the “Conversion Ratio”).
B. If at any time after the date of issuance of the Series D Preferred Stock, in the event the Corporation shall (i) make or issue a dividend or other distribution payable in Common Stock (other than with respect to the Series D Preferred Stock); (ii) subdivide outstanding shares of Common Stock into a larger number of shares; or (iii) combine outstanding shares of Common Stock into a smaller number of shares; or (iv) conduct a rights offering to its existing shareholders, the Conversion Ratio shall be adjusted appropriately by the Corporation’s Board of Directors.
C. If the Common Stock issuable upon the conversion of the Series D Preferred Stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for elsewhere in this Section 6), then in each such event, the holder of each share of Series D Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Series D Preferred Stock might have been converted immediately prior to such capital reorganization, reclassification or other change.
D. In each case of an adjustment or readjustment of the conversion ratio, the Corporation, at its expense, will seek to furnish each holder of Series D Preferred Stock with a certificate, showing such adjustment or readjustment, and stating in detail the facts upon which such adjustment or readjustment is based.
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E. Promptly after the Corporation’s receipt of a conversion notice, and upon surrender of the Series D Preferred Stock certificate for cancellation, the Corporation shall deliver to the holder a certificate representing the number of the Corporation’s shares of Common Stock into which such Series D Preferred Stock is converted. No fractional shares shall be issued, and, in lieu of any such fractional securities, each holder of Series D Preferred Stock who will otherwise be entitled to a fraction of a share upon surrender shall receive the next highest whole share.
7. Consolidation, Merger, Exchange, Etc . In case the Corporation shall enter into any consolidation, merger, combination, statutory share exchange or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, money and/or any other property, then in any such case the Series D Preferred Stock shall at the same time be similarly exchanged or changed into preferred shares of the surviving entity providing the holders of such preferred shares with (to the extent possible) the same relative rights and preferences as the Series D Preferred Stock.
8. Designation of Additional Series . The Board of Directors of the Corporation shall have the right to designate other shares of Preferred Stock having:
a. dividend, liquidation, or other preferences equal to, subordinate to, or superior to the rights of holders of the Series D Preferred Stock. Such preferences shall be determined in the resolutions creating such subsequent series.
9. Vote to Change the Terms of Series D Preferred Stock . The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the holders of not less than fifty percent (50%) of the then outstanding Series D Preferred Stock, shall be required for any change to the Corporation’s Articles of Incorporation which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series D Stock.
10. Lost or Stolen Certificates . Upon receipt by the Corporation of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any Series D Preferred Stock certificates, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Corporation and, in the case of mutilation, upon surrender and cancellation of the Series D Preferred Stock certificate(s), the Corporation shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however , the Corporation shall not be obligated to re-issue preferred stock certificates if the holder contemporaneously requests the Corporation to convert such Series D Preferred Stock into Common Stock in which case such Series D Preferred Stock shall be converted pursuant to the terms of the Corporation’s Articles of Incorporation and a preferred stock certificate shall only be issued if required pursuant to the terms hereof.
11. Failure or Indulgence Not Waiver . No failure or delay on the part of a holder of Series D Preferred Stock in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
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12. Status of Converted Stock . In case any shares of Series D Preferred Stock shall be converted, the shares so converted, or reacquired shall resume the status of authorized but unissued shares of Preferred Stock and shall no longer be designated as Series D Preferred Stock.
E. Creation of Series E Preferred Stock. That pursuant to authority conferred upon the Board of Directors by the Articles of Incorporation of said Corporation, said Board of Directors adopt a resolution providing for the issuance of a Series of 461,000 shares of Series E Preferred Stock pursuant to a written consent, dated September 25, 2014 which resolution is as follows:
Series E Preferred Stock
1. Designation, Amounts and Stated Value . The designation of this series, which consists of Four Hundred Sixty One Thousand (461,000) shares of Preferred Stock, is the Series E Preferred Stock (the “ Series E Preferred Stock ”). The “ Stated Value ” of the Series E Preferred Stock shall be $1 per share, being the per share value of the consideration received by the Corporation for the issuance of such shares. In the event of a liquidation or winding up of the Corporation, holders of the Series E Preferred Stock shall be entitled to receive the Stated Value per share of Series E Preferred Stock then outstanding.
2. Dividends . The Series E Preferred Stock shall be entitled to receive 12% per annum dividends paid monthly.
3. Rank . The Series E Preferred Stock shall rank parri passu with any other series of preferred stock hereafter designated by the Corporation and not designated as senior securities or subordinate to the Series E Preferred Stock.
4. Voting Rights . On all matters to come before the shareholder of the Corporation, the holder of Series E Preferred shall have that number of votes per share (rounded to the nearest whole share) equal to the product of (a) the number of shares of Series E Preferred held on the record date for the determination of the holders of the shares entitled to vote (the “Record Date “), or, if no Record Date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 40. Except as otherwise expressly provided by this Certificate or by applicable law, the holders of Series E Preferred shall vote together with the holders of the outstanding shares of all other capital stock of the Corporation (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
5. Redemption and Call Rights . Any time after December 31, 2015, the Corporation shall have the right, but not the obligation, to redeem, out of funds legally available, all of the unconverted outstanding shares of the Series E Preferred Stock (the “Redemption”). The Company shall redeem the Series E Preferred Stock by paying in cash an amount per share equal to $1.00 (the “Redemption Price”). In the event that the Corporation elects to redeem the shares of the Series E Preferred Stock, the Corporation shall give notice of such election by delivering an executed and completed notice of Redemption (“Notice of Redemption”) to the Holder setting forth the number of shares being redeemed along with the Redemption Price. In the case of the exercise of the Redemption rights set forth herein, the Redemption privilege shall be deemed to have been exercised upon the date of receipt by the Holder of the Notice of Redemption.
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6. Holder Conversion Rights . The holders of the Series E Preferred Stock shall have the following rights with respect to the conversion of the Series E Preferred Stock into shares of the Corporation’s Common Stock:
A. On December 31, 2014 and upon notice provided by the holder to the Corporation, a holder shall have the right to convert , at face value per share, all or any portion of their Series E Preferred Stock into shares of the Corporation’s Common Stock on the basis of forty (40) shares of Common Stock for each share of Series E Preferred Stock so converted or if the holder elects to convert on December 31, 2015, such shares shall be converted on the basis of twenty-five (25) shares of Common Stock for each share of Series E Preferred Stock (the “Conversion Ratio”).
B. If at any time after the date of issuance of the Series E Preferred Stock, in the event the Corporation shall (i) make or issue a dividend or other distribution payable in Common Stock (other than with respect to the Series E Preferred Stock); (ii) subdivide outstanding shares of Common Stock into a larger number of shares; or (iii) combine outstanding shares of Common Stock into a smaller number of shares; or (iv) conduct a rights offering to its existing shareholders, the Conversion Ratio shall be adjusted appropriately by the Corporation’s Board of Directors.
C. If the Common Stock issuable upon the conversion of the Series E Preferred Stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for elsewhere in this Section 6), then in each such event, the holder of each share of Series E Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Series E Preferred Stock might have been converted immediately prior to such capital reorganization, reclassification or other change.
D. In each case of an adjustment or readjustment of the conversion ratio, the Corporation, at its expense, will seek to furnish each holder of Series E Preferred Stock with a certificate, showing such adjustment or readjustment, and stating in detail the facts upon which such adjustment or readjustment is based.
E. Promptly after the Corporation’s receipt of a conversion notice, and upon surrender of the Series E Preferred Stock certificate for cancellation, the Corporation shall deliver to the holder a certificate representing the number of the Corporation’s shares of Common Stock into which such Series E Preferred Stock is converted. No fractional shares shall be issued, and, in lieu of any such fractional securities, each holder of Series E Preferred Stock who will otherwise be entitled to a fraction of a share upon surrender shall receive the next highest whole share.
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7. Consolidation, Merger, Exchange, Etc . In case the Corporation shall enter into any consolidation, merger, combination, statutory share exchange or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, money and/or any other property, then in any such case the Series E Preferred Stock shall at the same time be similarly exchanged or changed into preferred shares of the surviving entity providing the holders of such preferred shares with (to the extent possible) the same relative rights and preferences as the Series E Preferred Stock.
8. Designation of Additional Series . The Board of Directors of the Corporation shall have the right to designate other shares of Preferred Stock having:
a. dividend, liquidation, or other preferences equal to, subordinate to, or superior to the rights of holders of the Series E Preferred Stock. Such preferences shall be determined in the resolutions creating such subsequent series.
9. Vote to Change the Terms of Series E Preferred Stock . The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the holders of not less than fifty percent (50%) of the then outstanding Series E Preferred Stock, shall be required for any change to the Corporation’s Articles of Incorporation which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series E Stock.
10. Lost or Stolen Certificates . Upon receipt by the Corporation of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any Series E Preferred Stock certificates, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Corporation and, in the case of mutilation, upon surrender and cancellation of the Series E Preferred Stock certificate(s), the Corporation shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however , the Corporation shall not be obligated to re-issue preferred stock certificates if the holder contemporaneously requests the Corporation to convert such Series E Preferred Stock into Common Stock in which case such Series E Preferred Stock shall be converted pursuant to the terms of the Corporation’s Articles of Incorporation and a preferred stock certificate shall only be issued if required pursuant to the terms hereof.
11. Failure or Indulgence Not Waiver . No failure or delay on the part of a holder of Series E Preferred Stock in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
12. Status of Converted Stock . In case any shares of Series E Preferred Stock shall be converted, the shares so converted, or reacquired shall resume the status of authorized but unissued shares of Preferred Stock and shall no longer be designated as Series E Preferred Stock.
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F. Creation of Series F Preferred Stock. That pursuant to authority conferred upon the Board of Directors by the Articles of Incorporation of said Corporation, said Board of Directors adopt a resolution providing for the issuance of a Series of 1,500,000 shares of Series F Preferred Stock pursuant to a written consent, dated September 25, 2014, which resolution is as follows:
Series F Preferred Stock
1. Designation, Amounts and Stated Value . The designation of this series, which consists of One Million Five Hundred Thousand (1,500,000) shares of Preferred Stock, is the Series F Preferred Stock (the “ Series F Preferred Stock ”). The “ Stated Value ” of the Series F Preferred Stock shall be $1 per share, being the per share value of the consideration received by the Corporation for the issuance of such shares. In the event of a liquidation or winding up of the Corporation, holders of the Series F Preferred Stock shall be entitled to receive the Stated Value per share of Series F Preferred Stock then outstanding.
2. Dividends . The Series F Preferred Stock shall be entitled to receive 12% per annum dividends paid monthly.
3. Rank . The Series F Preferred Stock shall rank parri passu with any other series of preferred stock hereafter designated by the Corporation and not designated as senior securities or subordinate to the Series F Preferred Stock.
4. Voting Rights . On all matters to come before the shareholder of the Corporation, the holder of Series F Preferred shall have that number of votes per share (rounded to the nearest whole share) equal to the product of (a) the number of shares of Series F Preferred held on the record date for the determination of the holders of the shares entitled to vote (the “Record Date “), or, if no Record Date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (b) 34. Except as otherwise expressly provided by this Certificate or by applicable law, the holders of Series F Preferred shall vote together with the holders of the outstanding shares of all other capital stock of the Corporation (including and any other series of preferred stock then outstanding), and not as a separate class, series or voting group.
5. Redemption and Call Rights . Any time after December 31, 2015, the Corporation shall have the right, but not the obligation, to redeem, out of funds legally available, all of the unconverted outstanding shares of the Series F Preferred Stock (the “Redemption”). The Company shall redeem the Series F Preferred Stock by paying in cash an amount per share equal to $1.00 (the “Redemption Price”). In the event that the Corporation elects to redeem the shares of the Series F Preferred Stock, the Corporation shall give notice of such election by delivering an executed and completed notice of Redemption (“Notice of Redemption”) to the Holder setting forth the number of shares being redeemed along with the Redemption Price. In the case of the exercise of the Redemption rights set forth herein, the Redemption privilege shall be deemed to have been exercised upon the date of receipt by the Holder of the Notice of Redemption.
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6. Holder Conversion Rights . The holders of the Series F Preferred Stock shall have the following rights with respect to the conversion of the Series F Preferred Stock into shares of the Corporation’s Common Stock:
A. On December 31, 2015 and upon notice provided by the holder to the Corporation, a holder shall have the right to convert, at face value per share, all or any portion of their Series F Preferred Stock into shares of the Corporation’s Common Stock on the basis of thirty-three and 3,333/10,000 (33.3333) shares of Common Stock for each share of Series F Preferred Stock so converted (the “Conversion Ratio”).
B. If at any time after the date of issuance of the Series F Preferred Stock, in the event the Corporation shall (i) make or issue a dividend or other distribution payable in Common Stock (other than with respect to the Series F Preferred Stock); (ii) subdivide outstanding shares of Common Stock into a larger number of shares; or (iii) combine outstanding shares of Common Stock into a smaller number of shares; or (iv) conduct a rights offering to its existing shareholders, the Conversion Ratio shall be adjusted appropriately by the Corporation’s Board of Directors.
C. If the Common Stock issuable upon the conversion of the Series F Preferred Stock shall be changed into the same or different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for elsewhere in this Section 6), then in each such event, the holder of each share of Series F Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such capital reorganization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Series F Preferred Stock might have been converted immediately prior to such capital reorganization, reclassification or other change.
D. In each case of an adjustment or readjustment of the conversion ratio, the Corporation, at its expense, will seek to furnish each holder of Series F Preferred Stock with a certificate, showing such adjustment or readjustment, and stating in detail the facts upon which such adjustment or readjustment is based.
E. Promptly after the Corporation’s receipt of a conversion notice, and upon surrender of the Series F Preferred Stock certificate for cancellation, the Corporation shall deliver to the holder a certificate representing the number of the Corporation’s shares of Common Stock into which such Series F Preferred Stock is converted. No fractional shares shall be issued, and, in lieu of any such fractional securities, each holder of Series F Preferred Stock who will otherwise be entitled to a fraction of a share upon surrender shall receive the next highest whole share.
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7. Consolidation, Merger, Exchange, Etc . In case the Corporation shall enter into any consolidation, merger, combination, statutory share exchange or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, money and/or any other property, then in any such case the Series F Preferred Stock shall at the same time be similarly exchanged or changed into preferred shares of the surviving entity providing the holders of such preferred shares with (to the extent possible) the same relative rights and preferences as the Series F Preferred Stock.
8. Designation of Additional Series . The Board of Directors of the Corporation shall have the right to designate other shares of Preferred Stock having:
a. dividend, liquidation, or other preferences equal to, subordinate to, or superior to the rights of holders of the Series F Preferred Stock. Such preferences shall be determined in the resolutions creating such subsequent series.
9. Vote to Change the Terms of Series F Preferred Stock . The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting, of the holders of not less than fifty percent (50%) of the then outstanding Series F Preferred Stock, shall be required for any change to the Corporation’s Articles of Incorporation which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series F Stock.
10. Lost or Stolen Certificates . Upon receipt by the Corporation of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any Series F Preferred Stock certificates, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Corporation and, in the case of mutilation, upon surrender and cancellation of the Series F Preferred Stock certificate(s), the Corporation shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however , the Corporation shall not be obligated to re-issue preferred stock certificates if the holder contemporaneously requests the Corporation to convert such Series F Preferred Stock into Common Stock in which case such Series F Preferred Stock shall be converted pursuant to the terms of the Corporation’s Articles of Incorporation and a preferred stock certificate shall only be issued if required pursuant to the terms hereof.
11. Failure or Indulgence Not Waiver . No failure or delay on the part of a holder of Series F Preferred Stock in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
12. Status of Converted Stock . In case any shares of Series F Preferred Stock shall be converted, the shares so converted, or reacquired shall resume the status of authorized but unissued shares of Preferred Stock and shall no longer be designated as Series F Preferred Stock.
G. Authority to Amend . These Articles of Amendment were adopted by the unanimous consent of the Corporation’s Board of Directors on September 25, 2014 and duly approved by the shareholders as required by law and the Articles of Incorporation of the Corporation.
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IN WITNESS WHEREOF , the undersigned, being the Chief Executive Officer of this Corporation, has executed these Articles of Amendment as of September 25, 2014.
IEG HOLDINGS CORPORATION | ||
By: | /s/ Paul Mathieson | |
Paul Mathieson, President and Chief Executive Officer |
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EXHIBIT A
IEG HOLDINGS CORPORATION
CONVERSION NOTICE
Fax: |
IEG HOLDINGS CORPORATION
Reference is made to the Certificate of Designations, Preferences and Rights of Series _ Preferred Stock of IEG HOLDINGS CORPORATION (the “Certificate of Designations”). In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the number of shares of Series __Preferred Stock (the “Preferred Shares”), of IEG HOLDINGS CORPORATION indicated below into shares of Common Stock (the “Common Stock”), of the Company, as of the date specified below.
Date of Conversion: |
Number of Preferred Shares to be converted: |
Stock certificate no(s). of Preferred Shares to be converted: |
Tax ID Number (If applicable): |
Please confirm the following information:
Conversion Price: |
Number of shares of Common Stock to be issued: |
Please issue the Common Stock into which the Preferred Shares are being converted in the following name and to the following address:
Issue to: | ||
Address: |
Telephone Number: |
Facsimile Number: |
Authorization: |
By: | ||
Title: | ||
Dated: |
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AMENDED AND RESTATED BY-LAWS
OF
IEG HOLDINGS CORPORATION
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. The Annual Meeting. The annual meeting of the stockholders of IEG Holdings Corporation (the “Corporation”) for the election of directors and for the transaction of such other business as may come before the meeting shall be held within one hundred and fifty days after the close of the Corporation’s Fiscal Year at such date, time, and location as the Board of Directors shall designate.
Section 2. Special Meetings. Special meetings of the stockholders, unless otherwise prescribed by statute, may be called at any time by the Board of Directors or the President and shall be called by the President or Secretary at the request in writing of stockholders of record owning at least twenty-five per centum (25%) of the shares of stock of the Corporation outstanding and entitled to vote.
Section 3. Notice of Meetings. Notice of the place, date and time of the holding of each annual and special meeting of the stockholders and, in the case of a special meeting, the purpose or purposes thereof, shall be given personally or by mail in a postage prepaid envelope to each stockholder entitled to vote at such meeting, not less than ten nor more than sixty days before the date of such meeting, and, if mailed, shall be directed to such stockholder at his address as it appears on the records of the Corporation, unless he shall have filed with the Secretary of the Corporation a written request that notices to him be mailed to some other address, in which case it shall be directed to him at such other address. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy and shall not, at the beginning of such meeting, object to the transaction of any business because the meeting is not lawfully called or convened, or who shall, either before or after the meeting, submit a signed waiver of notice, in person or by proxy. Unless the Board of Directors shall fix, after the adjournment, a new record date for an adjourned meeting, notice of such adjourned meeting need not be given if the time and place to which the meeting shall be adjourned were announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
Section 4. Place of Meetings. Meetings of the stockholders may be held at such place, within or without the State of Florida, as the Board of Directors or the officer calling the same shall specify in the notice of such meeting, or in a duly executed waiver of notice hereof.
Section 5. Quorum. At all meetings of the stockholders the holders of a majority of the votes of the shares of stock of the Corporation issued and outstanding and entitled to vote shall be present in person or by proxy to constitute a quorum for the transaction of any business, except as otherwise provided by statute or in the Certificate of Incorporation. In the absence of a quorum, the holders of a majority of the shares of stock present in person or by proxy and entitled to vote, or if no stockholder entitled to vote is present, then any officer of the Corporation may adjourn the meeting. At any such adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.
Section 6. Organization. At each meeting of the stockholders, the President, or in his absence or inability to act, any person chosen by a majority of those stockholders present, in person or by proxy and entitled to vote, shall act as chairman of the meeting. The Secretary, or in his absence or inability to act, any person appointed by the chairman of the meeting, shall act as secretary of the meeting and keep the minutes thereof.
Section 7. Order of Business . The order of business at all meetings of the stockholders shall be as determined by the chairman of the meeting.
Section 8. Voting. Except as otherwise provided by statute, by the Certificate of Incorporation, or by any certificate duly filed in the State of Florida the Florida Corporations Act, each holder of record of shares of stock of the Corporation having voting power shall be entitled at each meeting of the stockholders to one vote for every share of such stock standing in his name on the record of stockholders of the Corporation on the date fixed by the Board of Directors as the record date for the determination of the stockholders who shall be entitled to notice of and to vote at such meeting; or if such record date shall not have been so fixed, then at the close of business on the day next preceding the date on which notice thereof shall be given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; or each stockholder entitled to vote at any meeting of stockholders may authorize another person or persons to act for him by a proxy signed by such stockholder or his attorney-in-fact. Any such proxy shall be delivered to the secretary of such meeting at or prior to the time designated in the order of business for so delivering such proxies. No proxy shall be valid after the expiration of three years from the date thereof, unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the stockholder executing it, except in those cases where an irrevocable proxy is permitted by law. Except as otherwise provided by statute, these By-Laws, or the Certificate of incorporation, any corporate action to be taken by vote of the stockholders shall be authorized by a majority of the total votes, cast at a meeting of stockholders by the holders of shares present in person or represented by proxy and entitled to vote on such action. Unless required by statute, or determined by the chairman of the meeting to be advisable, the vote on any question need not be by written ballot. On a vote by written ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and shall state the number of shares voted.
Section 9. List of Stockholders. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.
Section 10. Action by Written Consent. Any action which is required to be or may be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice to stockholders and without a vote if consents in writing, setting forth the action so taken, shall have been signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or to take such action at a meeting at which all shares entitled to vote thereon were present and voted.
Section 11. Duration and Revocation of Consents . Consents to corporate action shall be valid for a maximum of sixty (60) days after the date of the earliest dated consent delivered to the Corporation in the manner provided in Florida Corporation Law. Consents may be revoked by written notice (i) to the Corporation, (ii) to the stockholder or stockholders soliciting consents or soliciting revocations in opposition to action by consent proposed by the Corporation (the “Soliciting Stockholders”), or (iii) to a proxy solicitor or other agent designated by the Corporation or the Soliciting Stockholders.
Section 12. Notice of Action by Consent. The Corporation shall give prompt notice of the taking of corporate action without a meeting by less than unanimous written consent to stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take the Action were delivered to the Corporation in the manner provided in Florida Corporation Law.
ARTICLE II
BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the Corporation shall be managed by the Board of Directors. The Board of Directors may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not by statute or the Certificate of Incorporation directed or required to be exercised or done by the stockholders.
Section 2. Number, Qualifications, Election, and Term of Office. The number of directors of the Corporation shall be as determined by vote of a majority of the entire Board of Directors. All of the directors shall be of full age. Directors need not be stockholders. Except as otherwise provided by statute or these By-Laws, the directors shall be elected at the annual meeting of the stockholders for the election of directors at which a quorum is present, and the persons receiving a plurality of the votes cast at such election shall be elected. Each director shall hold office until the next annual meeting of the stockholders and until his successor shall have been duly elected and qualified or until his death, or until he shall have resigned, or have been removed, as hereinafter provided in these By-Laws, or as otherwise provided by statute or the Certificate of Incorporation.
Section 3. Place of Meeting. Meetings of the Board of Directors may be held at such place, within or without the State of Florida, as the Board of Directors may from time to time determine or shall be specified in the notice or waiver of notice of such meeting.
Section 4. First Meeting. The Board of Directors shall meet for the purpose of organization, the election of the officers of the Corporation, and the transaction of other business, as soon as practicable after each annual meeting of the stockholders. Notice of such meeting need not be given. Such meeting may be held at any other time or place (within or without the State of Florida) which shall be specified in a notice thereof given as hereinafter Provided in Section 7 of this Article II.
Section 5. Regular Meetings . Regular meetings of the Board of Directors shall be held at such time and at such place as the Board of Directors may from time to time determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day. Notice of regular meetings of the Board of Directors need not be given except as otherwise required by statute or these By-Laws.
Section 6. Special Meetings. Special meetings of the Board of Directors may be called by one or more directors of the Corporation or by the President.
Section 7. Notice of Meetings. Notice of each special meeting of the Board of Directors (and of each regular meeting for which notice shall be required) shall be given by the Secretary as hereinafter provided in this Section 7, in which notice shall be stated the time and place of the meeting. Notice of each such meeting shall be delivered to each director either personally or by telephone, telegraph cable or wireless, at least twenty-four hours before the time at which such meeting is to be held or by first-class ail, postage prepaid, addressed to him at his residence, or usual place of business, at least three days before the day on which such meeting is to beheld. Notice of any such meeting need not be given to any director who shall, either before or after the meeting, submit a signed waiver of notice or who shall attend such meeting without protesting, prior to or at its commencement, the lack of notice to him. Except as otherwise specifically required by these By-Laws, a notice or waiver of notice of any regular or special meeting need not state the purpose of such meeting.
Section 8. Quorum and Manner of Acting . A majority of the entire Board of Directors shall be present in person at any meeting of the Board of Directors in order to constitute a quorum for the transaction of business at such meeting, and, except as otherwise expressly required by statute or the Certificate of Incorporation, the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum at any meeting of the Board of Directors, a majority of the directors present thereat, or if no director be present, the Secretary may adjourn such meeting to another time and place, or such meeting, unless it be the first meeting of the Board of Directors, need not be held. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called. Except as provided in Article III of these By-Laws, the directors shall act only as a Board and the individual directors shall have no power as such.
Section 9. Organization. At each meeting of the Board of Directors, the President, or, in his absence or inability to act, another director chosen by a majority of the directors present shall act as chairman of the meeting and preside thereat. The Secretary (or, in his absence or inability to act any person appointed by the chairman) shall act as secretary of the meeting and keep the minutes thereof.
Section 10. Resignations. Any director of the Corporation may resign at any time by giving written notice of his resignation to the Board of Directors or the President or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
Section 11. Vacancies. Vacancies may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole Board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or holders of at least ten percent of the votes of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office. Except as otherwise provided in these By-Laws, when one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies.
Section 12. Removal of Directors. Except as otherwise provided in the Certificate of Incorporation or in these By-Laws, any director may be removed, either with or without cause, at any time, by the affirmative vote of a majority of the votes of the issued and outstanding stock entitled to vote for the election of directors of the Corporation given at a special meeting of the stockholders called and held for the purpose; and the vacancy in the Board of Directors caused by any such removal may be filled by such stockholders at such meeting, or, if the stockholders shall fail to fill such vacancy, as in these By-Laws provided.
Section 13. Compensation. The Board of Directors shall have authority to fix the compensation, including fees and reimbursement of expenses, of directors for services to the Corporation in any capacity, provided no such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.
Section 14. Action Without Meeting Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.
ARTICLE III
COMMITTEES
Section 1. Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it.
Section 2. Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article III of these by-laws.
ARTICLE IV
OFFICERS
Section 1. Number and Qualifications. The officers of the Corporation shall be the President, Secretary, and Treasurer. Any two or more offices may be held by the same person. Such officers shall be elected from time to time by the Board of Directors, each to hold office until the meeting of the Board of Directors following the next annual meeting of the stockholders, or until his successor shall have been duly elected and shall have qualified, or until his death, or until he shall have resigned, or have been removed, as hereinafter provided in these By-Laws. The Board of Directors may from time to time elect, or the President may appoint, such other officers (including, but not limited to, one or more Vice Presidents, Assistant Vice Presidents, Assistant Secretaries, and Assistant Treasurers), and such agents, as may be necessary or desirable for the business of the Corporation. Such other officers and agents shall have such duties and shall hold their offices for such terms as may be prescribed by the Board of Directors or by the appointing authority.
Section 2. Resignations. Any officer of the Corporation may resign at any time by giving written notice of his resignation to the Board of Directors, the President or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 3. Removal. Any officer or agent of the Corporation may be removed, either with or without cause, at any time, by the vote of the majority of the entire Board of Directors at any meeting of the Board of Directors, or, except in the case of an officer or agent elected or appointed by the Board of Directors, by the President. Such removal shall be without prejudice to the contractual rights, if any, of the person so removed.
Section 4. Vacancies. A vacancy in any office, whether arising from death, resignation, removal or any other cause, may be filled for the unexpired portion of the term of the office which shall be vacant, in the manner prescribed in these By-Laws for the regular election or appointment of such office.
Section 5. Officers’ Bonds or Other Security. If required by the Board of Directors, any officer of the Corporation shall give a bond or other security for the faithful performance of his duties, in such amount and with such surety or sureties as the Board of Directors may require.
Section 6. Compensation. The compensation of the officers of the Corporation for their services as such officers shall be fixed from time to time by the Board of Directors; provided, however, that the Board of Directors may delegate to the President the power to fix the compensation of officers and agents appointed by the President. An officer of the Corporation shall not be prevented from receiving compensation by reason of the fact that he is also a director of the Corporation.
Section 7. President. The President shall be the Chief Executive Officer of the Corporation and shall have the general and active management of the business of the Corporation and general and active supervision and direction over the other officers, agents and employees and shall see that their duties are properly performed. He shall, if present, preside at each meeting of the stockholders and of the Board of Directors and shall be an ex-officio member of all committees of the Board of Directors. He shall perform all duties incident to the office of President and Chief Executive Officer and such other duties as may from time to time be assigned to him by the Board of Directors.
Section 8. Secretary. The Secretary shall:
(a) Keep or cause to be kept in one or more books provided for that purpose, the minutes of the meetings of the Board of Directors, the committees of the Board of Directors and the stockholders;
(b) See that all notices are duly given in accordance with the provisions of these By-Laws and as required by law;
(c) Be custodian of the records and the seal of the Corporation and affix and attest the seal to all stock certificates of the Corporation (unless the seal of the Corporation on such certificates shall be a facsimile, as hereinafter provided) and affix and attest the seal to all other documents to be executed on behalf of the Corporation under its seal;
(d) See that the books, reports, statements, certificates and other documents and records required by law to be kept and filed are properly kept and filed; and
(e) In general, perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board of Directors or the President.
Section 9. Treasurer. The Treasurer shall be the chief financial officer of the Corporation and shall exercise general supervision over the receipt, custody, and disbursements of corporate funds. The Treasurer shall sign, make and indorse in the name of the corporation, all checks, drafts, warrants and orders for the payment of money, and pay out and dispose of same and receipts for such, and, in general, perform all the duties incident to the office of Treasurer. He shall have such further powers and duties as may be conferred upon him from time to time by the President or the Board of Directors.
ARTICLE V
INDEMNIFICATION
To the fullest extent permitted by law, the Corporation shall indemnify any director or officer of the Corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suitor proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, agent or employee of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees), liability, loss, judgment, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceedings, had no reasonable cause to believe his conduct was unlawful. The termination of any action, upon a plea of nolo contendere or equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect of any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
Such indemnity shall inure to the benefit of the heirs, executors and administrators of any director or officer so indemnified pursuant to this Article. The right to indemnification under this Article shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its disposition; provided however, that, if the Florida Corporations Law requires, the payment of such expenses incurred in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article or otherwise. Such indemnification and advancement of expenses shall be in addition to any other rights to which those directors and officers seeking indemnification and advancement of expenses may be entitled under any law, agreement, vote of stockholders, or otherwise.
Any repeal or amendment of this Article by the stockholders of the Corporation or by changes in applicable law shall, to the extent permitted by applicable law, be prospective only, and shall not adversely affect any right to indemnification or advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or amendment. In addition to the foregoing, the right to indemnification and advancement of expenses shall be to the fullest extent permitted by the Corporation Act of the State of Florida or any other applicable law and all amendments to such laws as hereafter enacted from time to time.
ARTICLE VI
STOCK
Section 1. Certificates. Every holder of stock shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman of the Board of Directors, if any, or the President, and by the Secretary or an Assistant Secretary, of the Corporation, certifying the number of shares owned by him in the Corporation. Any of or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.
Section 2. Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.
ARTICLE VII
MISCELLANEOUS
Section 1. Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January of each year and end on the last day of December of each year.
Section 2. Seal. The Board of Directors may provide a corporate seal, which shall be in the form of the name of the Corporation and the words and figures “Corporate Seal, IEG Holdings Corporation”.
Section 3. Waiver of Notice of Meetings of Stockholders, Directors and Committees. Any written waiver of notice, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice.
Section 4. Interested Directors; Quorum. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other Corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (l) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
Section 5. Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs, or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.
Section 6. Amendments. These By-Laws may be amended or repealed, or new By-Laws may be adopted, (1) at any annual or special meeting of the stockholders, by a majority of the total votes of the stockholders, present or in person or represented by proxy and entitled to vote on such action; provided, however, that the notice of such meeting shall have been given as provided in these By-Laws, which notice shall mention that amendment or repeal of these By-Laws, or the adoption of new By-Laws, is one of the purposes of such meeting; (2) by written consent of the stockholders pursuant to Section 10 of Article I; or (3) by action of the Board of Directors.
I, the undersigned, Secretary of the Corporation, do hereby certify that the foregoing is a true, complete, and accurate copy of the By-laws of IEG Holdings Corporation., duly adopted by unanimous written consent of the Board of Directors on the 16 th day of August, 2013, and I do further certify that these By-laws have not since been altered, amended, repealed, or rescinded, and are now in full force and effect.
/s/ Paul Mathieson | |
Paul Mathieson Secretary |
Exhibit 5.1
LEGAL & COMPLIANCE, LLC
LAURA ANTHONY, ESQUIRE LAZARUS ROTHSTEIN, ESQUIRE CHAD FRIEND, ESQUIRE MICHAEL RASMUSSEN, ESQUIRE _______________
OF COUNSEL: PETER P. LINDLEY, ESQUIRE, CPA STUART REED, ESQUIRE MARC S. WOOLF, ESQUIRE |
WWW.LEGALANDCOMPLIANCE.COM WWW.SECURITIES-LAW-BLOG.COM |
DIRECT E-MAIL: LANTHONY@LEGALANDCOMPLIANCE.COM
_____________, 2014
IEG Holdings Corporation
6160 West Tropicana Ave., Suite E-13
Las Vegas, NV 89103
Re: |
IEG Holdings Corporation Registration Statement on Form S-1 |
Gentlemen:
We have acted as counsel for IEG Holdings Corporation, a Florida corporation (the “Company”), in connection with the registration under the Securities Act of 1933, as amended (the “Act”) of 172,965,945 shares of common stock (the “Registered Shares”) offered for resale by certain selling stockholders (the “Selling Stockholders”) named in the Company’s registration statement on Form S-1 (the “Registration Statement”), filed by the Company with the Securities and Exchange Commission.
We have examined originals or certified copies of such corporate records of the Company and other certificates and documents of officials of the Company, public officials and others as we have deemed appropriate for purposes of this letter. We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to authentic original documents of all copies submitted to us as conformed and certified or reproduced copies.
Subject to and in reliance upon the foregoing, we are of the opinion that the Registered Shares have been validly authorized and are validly issued, fully paid and non-assessable.
We express no opinion with regard to the applicability or effect of the law of any jurisdiction other than, as in effect on the date of this letter, (a) the internal laws of the State of Florida; and (b) the federal laws of the United States.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the Registration Statement. In so doing, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
Legal & Compliance, LLC
By: | /s/ Laura Anthony | |
Laura Anthony, Esq. |
330 CLEMATIS STREET, #217 ● WEST PALM BEACH, FLORIDA ● 33401 ● PHONE: 561-514-0936 ● FAX 561-514-0832
LOAN AND SECURITY AGREEMENT
between
IEC SPV, LLC
and
BFG Loan Holdings, LLC
TABLE OF CONTENTS
S ection | Title | Page | ||
Section 1. | Definitions | 1 | ||
Section 2. | The Loan | 13 | ||
Section 3. | Collateral | 16 | ||
Section 4. | Representations and Warranties | 20 | ||
Section 5. | Conditions Precedent | 24 | ||
Section 6. | Affirmative Covenants | 26 | ||
Section 7. | Negative Covenants | 32 | ||
Section 8. | Default | 34 | ||
Section 9. | Miscellaneous | 40 | ||
Schedule 4.7 | Intellectual Property | |||
Schedule 4.13 | Liens | |||
Schedule 7.4 | Guaranties |
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT, dated as of June 11, 2012 is made and entered into by and between IEC SPV, LLC , a Delaware limited liability company (the “ Borrower ”), and BFG Loan Holdings, LLC , a Florida limited liability company (the “ Lender ”).
BACKGROUND
The Borrower desires to obtain, and the Lender has agreed to provide, the Loan defined below and the Lender is willing to make the Loan upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and intending to be legally bound, the parties agree as follows:
1. DEFINITIONS .
1.1 Definitions . As used in this Agreement, the following terms shall have these meanings:
“ Account ” and “ Accounts ” shall mean an account as now or hereafter defined in the UCC, now owned or hereafter acquired by the Borrower or in which the Borrower now holds or hereafter acquires any interest and, in any event, shall include, without limitation, all accounts receivable, book debts and other forms of obligations (other than forms of obligations evidenced by Chattel Paper, Documents or Instruments) now owned or hereafter received or acquired by or belonging or owing to the Borrower (including, without limitation, under any trade name, style or division thereof) whether arising out of goods sold or services rendered by the Borrower or from any other transaction, whether or not the same involves the sale of goods or services by Borrower (including, without limitation, any such obligation which may be characterized as an account or contract right under the UCC) and all of the Borrower’s rights in, to and under all purchase orders or receipts now owned or hereafter acquired by it for goods or services, and all of the Borrower’s rights to any goods represented by any of the foregoing (including, without limitation, unpaid seller’s rights of rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), and all monies due or to become due to the Borrower under all purchase orders and contracts for the sale of goods or the performance of services or both by the Borrower (whether or not yet earned by performance on the part of the Borrower or in connection with any other transaction), now in existence or hereafter occurring, including, without limitation, the right to receive the proceeds of said purchase orders and contracts, and all collateral security and guarantees of any kind given by any person with respect to any of the foregoing.
“ Account Debtor ” shall mean any party obligated to make payments under any Account including any “Account Debtor” as defined in the UCC.
“ ACH Credit Party ” means the Lender, as the holder of the ACH Obligations.
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“ ACH Obligations ” means the unpaid amounts due and owing by the Borrower to the ACH Credit Party, now existing or hereafter arising or incurred, in connection with or arising out of the ACH Credit Party’s debit or credit exposure under the ACH Transactions made for or on behalf of the Borrower.
“ ACH Transactions ” means Automated Clearing House transactions which involve the use of electronic credits or debits moving funds either internally within the ACH Credit Party, to the ACH Credit Party from another financial institution, or from the ACH Credit Party to another financial institution, all in accordance with the rules promulgated by the National Automated Clearing House Association.
“ Affiliate ” shall mean, as to any Person, an individual, corporation, partnership, limited liability company, joint venture, association, company, trust, business trust, and any other entity of whatever nature, excluding IEG Holdings Limited, an Australian public company, (a) that directly or indirectly controls, or is controlled by, or is under common control with such Person; (b) that directly or indirectly beneficially owns or holds ten percent (10%) or more of any class of the outstanding voting stock of such Person; or (c) ten percent (10%) or more of whose outstanding voting stock is directly or indirectly beneficially owned or held by such Person. The term control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
“ Agreement ” shall mean this Loan and Security Agreement, as amended, supplemented, or modified from time to time and all exhibits and schedules to this Agreement.
“ Anti-Terrorism Law ” shall mean any and all existing or future federal, state and local statutes, ordinances, regulations, rules, executive orders, standards and requirements, including the requirements imposed by common law, concerning or relating to related to money laundering or financing terrorism including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (“ PATRIOT Act ”) of 2001 (Title III of Pub. L. 107-56), The Currency and Foreign Transactions Reporting Act (also known as the “ Bank Secrecy Act ”, 31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959), the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) and Executive Order 13224 (effective September 24, 2001).
“ Approved Operating Agreement ” shall mean the Limited Liability Company Agreement dated June 11, 2012 of and for Borrower as approved by the Lender, in form and substance acceptable to the Lender in its sole discretion.
“ Applicable Percentage ” shall initially equal ninety percent (90%). On or before sixty (60) days from the Closing Date, the Borrower may elect to permanently reduce the Applicable Percentage to either eighty percent (80%) or seventy percent (70%) by sending written notice to the Lender executed by the Borrower and received by the Lender during such period. Once the Borrower has elected to reduce the Applicable Percentage, it may be reduced further as provided hereby but shall never be increased.
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“ Approved Purchase Agreement ” shall mean the agreement by which the Borrower purchases a Consumer Loan from its Parent, in form and substance acceptable to the Lender in its sole discretion.
“ Approved Servicing Agreement ” shall mean the agreement by which the Parent of Borrower services a Consumer Loan for the Borrower, in form and substance acceptable to the Lender in its sole discretion.
“ Authorized Financial Officer ” shall mean the vice president of finance, treasurer or chief financial officer of the Parent.
“ Authorized Manager ” shall mean a Person appointed and authorized by the Borrower pursuant to the Approved Operating Agreement to act as a manager or managing member of the Borrower.
“ Availability Period ” shall mean the period commencing on the date of this Agreement and ending on the Term Conversion Date, provided that no Event of Default shall exist or be continuing.
“ Business Day ” shall mean any day other than a Saturday, Sunday, or other day on which commercial banks in Tampa, Florida are authorized or required to close under the laws of the State of Florida.
“ Capitalized Lease ” shall mean all lease obligations for any property (whether real, personal or mixed) which have been or should be capital on the books of the lessee in accordance with GAAP.
“ Closing Date ” or “ Closing ” shall mean the date of this Agreement.
“ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, including all regulations thereunder and all published interpretations thereof.
“ Collateral ” shall mean all personal and fixture property of every kind and nature, whether now existing or hereafter arising, in which the Borrower now has or may hereafter acquire any interest, and wherever located including, without limitation: (a) all Consumer Loans; (b) all Inventory, Equipment, Fixtures, Accounts, Chattel Paper, Instruments, Documents, real property, securities or other Investment Property, and General Intangibles; (c) all bank or other deposit accounts owned by or maintained by or on behalf of the Borrower, and all present and future funds on deposit in those deposit accounts; (d) all substitutes and replacements for, accessions, attachments, and other additions to, and tools, parts, and equipment used in connection with any of the above; (e) all certificates of title and certificates of origin or manufacturers statements of origin relating to any of the foregoing; (f) all returned or repossessed Goods arising from or relating to any Accounts; (g) all letter-of-credit rights (whether or not the letter of credit is evidenced by a writing); (h) all commercial tort claims, (i) any other contract rights or rights to the payment of money; (j) all insurance claims; and (k) all Proceeds and products of any of the foregoing; (l) all recorded data of any type, including ledger sheets, files, records, documents, and instruments (including computer programs, tapes, and related electronic data processing software) evidencing an interest in or relating to the above. The terms Chattel Paper, Documents, Fixtures, Goods, Instruments, and Investment Property shall have the meanings assigned to those terms in the UCC.
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“ Collection Account ” shall man that certain deposit account in the name of the Parent at Well Fargo Bank, N.A., Account No. 5076080125, or other segregated deposit account established and maintained for the benefit of the Borrower at a federally insured depository institution that is well capitalized and satisfactory to the Lender.
“ Compliance Certificate ” shall mean a certificate, in form and substance satisfactory to the Lender in its sole discretion, verifying the Maximum Loan Amount and computation thereof and incorporating the Consumer Loan Schedule.
“ Consumer Loan ” means, as of any date, all loans originated or made by the Parent or an Affiliate of the Parent, whether or not transferred to the Borrower pursuant to the Approved Purchase Agreement between the Borrower and the Parent, together with the related documents for such loan. Any Consumer Loan originated by the Parent or any Affiliate that was intended to be transferred to the Borrower which is in fact not so transferred for any reason including, without limitation, a breach of a representation or warranty with respect thereto, shall continue to be a Consumer Loan hereunder.
“ Consumer Loan Debtor ” shall mean an independent third Person that is the obligor under a Consumer Loan.
“ Consumer Loan Proceeds ” means the Proceeds and any and all other amounts collected by Borrower from or relating to all Consumer Loans.
“ Consumer Loan Schedule ” means, as of any date, a schedule identifying the Consumer Loans for which the Borrower is the owner and payee (as amended from time to time in accordance with the terms hereof), which schedule shall set forth for each Consumer Loan: (a) the loan number of such Consumer Loan; (b) the name of the related Consumer Loan Debtor and the street address for the same, including the zip code; (c) the maturity date of the Consumer Loan; (d) the original principal balance of the Consumer Loan; (e) the outstanding principal balance of the Consumer Loan; (f) the first payment date of the Consumer Loan; (g) the status of the Consumer Loan’s performance or delinquency, if any, and (g) the interest rate for the Consumer Loan in effect. The Consumer Loan Schedule shall be amended to reflect the purchase of additional Consumer Loans by the Borrower as provided herein.
“ Debt ” shall mean, without duplication, (a) all items which in accordance with GAAP would be included in determining total liabilities as shown on the liability side of a consolidated balance sheet of the Borrower and its Subsidiaries, if any, as of the date on which Debt is to be determined including trade debt and accruals, (b) all indebtedness secured by any Lien on any property or asset owned or held by the Borrower and any Subsidiary whether or not the secured indebtedness shall have been assumed, (c) all indebtedness of others with respect to which the Borrower or any Subsidiary has become liable by way of a guaranty or endorsement (other than for collection or deposit in the ordinary course of business), (d) all contingent liabilities of the Borrower or any Subsidiary, including but not limited to contingent liabilities in connection with outstanding letters of credit, and (e) lease obligations that, in conformity with GAAP, have been or should be capitalized on such entity’s balance sheet.
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“ Default Rate ” shall have the meaning set forth in Section 8.3.
“ Defaulted Consumer Loan ” means any Consumer Loan (a) as to which there has been an Event of Bankruptcy for the related Consumer Loan Debtor, (b) which has been written off by the Borrower or has otherwise been identified by the Borrower as uncollectible, (c) as to which any payment, or part thereof, remains unpaid for 185 days or more from the original due date for such payment, exclusive of any advance by the Borrower or an Affiliate of the Borrower, or (d) as to which the Borrower has initiated collection proceedings against the related Consumer Loan Debtor.
“ Delinquent Consumer Loan ” means a Consumer Loan as to which all or any portion of a scheduled payment remains unpaid past the scheduled due date with respect thereto, exclusive of any advance by the Borrower or an Affiliate of the Borrower.
“ Dollars ” shall mean the lawful currency of the United States of America.
“ Eligible Consumer Loan Amount ” means the Eligible Consumer Loan Principal Balance of a Consumer Loan held by the Borrower for which the Borrower is the payee that satisfies the following requirements: (a) the Consumer Loan was originated by the Parent of the Borrower in the ordinary course of the Parent’s business and in accordance with its underwriting policy, was purchased by the Borrower pursuant to the Approved Purchase Agreement, and is serviced by the Parent pursuant to the Approved Servicing Agreement; (b) the Consumer Loan was originated in the United States of America to a Consumer Loan Debtor domiciled in the United States and is payable in Dollars; (c) the Consumer Loan complied on the date of its origination and now complies in all material respects with all requirements of applicable federal, state and local laws and regulations thereunder; (d) the Consumer Loan arises under a debt instrument executed by the related Consumer Loan Debtor, is in full force and effect and constitutes the legal, valid and binding obligation of such Consumer Loan Debtor, enforceable against such Consumer Loan Debtor in accordance with its terms and as to which such instrument is evidenced by no more than one original executed copy; (e) the maturity date of the Consumer Loan has not been extended, the interest rate, margin (if applicable) and payment frequency of which have not been modified and no other material terms of which have been waived or modified; (f) the Consumer Loan is not subject to any dispute, litigation or counterclaim and is not subject to any defense (including the defense of usury), rescission, reduction or offset; (g) the Consumer Loan is fully assignable without any requirement to obtain the consent of, or give notice to, the related Consumer Loan Debtor or any other Person; (h) the term to maturity of such Consumer Loan was no more than 60 months from the origination of the Consumer Loan; (i) the Consumer Loan is owned by the Borrower free of any title defects or any Liens, except the security interest in favor of the Lender; (j) the related Consumer Loan Debtor for the Consumer Loan is not an officer, director or employee of the Borrower or any Affiliate; (k) neither the Borrower nor any Affiliate of Borrower has made advances to the related Consumer Loan Debtor for the payment of the Consumer Loan or to cure any delinquency of the Consumer Loan; and (l) the Consumer Loan is not a Defaulted Consumer Loan.
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“ Eligible Consumer Loan Principal Balance ” means for any Consumer Loan, the outstanding principal balance of such Consumer Loan multiplied by (a) one hundred percent (100.0%) if the payment of the Consumer Loan is current, or, (b) if such Consumer Loan is a Delinquent Consumer Loan, then (i) one hundred percent (100%) if the Delinquent Consumer Loan is from 0 through 10 days delinquent, (ii) ninety five percent (95%) if the Delinquent Consumer Loan is from 11 through 15 days delinquent, (iii) eighty percent (80%) if the Delinquent Consumer Loan is from 16 through 30 days delinquent, (iv) sixty percent (60%) if the Delinquent Consumer Loan is from 31 through 60 days delinquent, (v) forty percent (40%) if the Delinquent Consumer Loan is between from 61 through 90 days delinquent, (vi) twenty percent (20%) if the Delinquent Consumer Loan is from 91 through 120 days delinquent, and (vii) five percent (5%) if the Delinquent Consumer Loan is from 121 through 184 days delinquent.
“ Employee Benefit Plan ” shall mean an employee benefit plan as defined in Section 3(3) of ERISA, other than a Multiemployer Plan, whether formal or informal and whether legally binding or not.
“ Environmental Laws ” shall mean any and all existing or future federal, state and local statutes, ordinances, regulations, rules, executive orders, standards and requirements, including the requirements imposed by common law, concerning or relating to industrial hygiene and the protection of health, safety and the environment including, without limitation: (i) the Comprehensive Environmental Response, Compensation and Liability act of 1980, as amended, 42 U.S.C. §9601 et seq . (“ CERCLA ”); (ii) the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. §6901 et seq . (“ RCRA ”); (iii) the Clean Air Act, as amended, 42 U.S.C. §7901 et seq .; (iv) the Clean Water Act, as amended, 33 U.S.C. § 1251 et seq .; (v) the Hazardous Materials Transportation Act, as amended, 49 U.S.C. §1801 et seq .; and (vi) the Toxic Substance Control Act, 15 U.S.C. §2601 et seq., as amended (“ TSCA ”). Any terms mentioned herein which are defined in any applicable Environmental Law shall have the meanings ascribed to such terms in said laws; provided, however, that if any of such laws are amended so as to broaden any term defined therein, such broader meaning shall apply subsequent to the effective date of such amendment.
“ Equipment ” shall mean any “equipment” as defined in the UCC, and in any event includes all machinery, equipment, furnishings, fixtures and vehicles, and all additions, substitutions and replacements for any of the foregoing, wherever located, together with all attachments, components, parts, equipment and accessories installed on or affixed to the Equipment.
“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time, including regulations thereunder and published interpretations thereof.
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“ ERISA Affiliate ” shall mean any corporation domesticated in the United States of America which is a member of the same controlled group of corporations as the Borrower within the meaning of Section 414(b) of the Code, or any trade business which is under common control with the Borrower within the meaning of Section 414(c) the Code.
“ Event of Bankruptcy ” means, for any Person: (a) a proceeding shall have been instituted and remains unstayed or undismissed for a period of 60 days in a court having jurisdiction in the premises seeking a decree or order for relief in respect of such Person in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person or for all or substantially all of its property, or for the winding-up or liquidation of its affairs; or (b) the commencement by such Person of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or such Person’s consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person or for all or substantially all of its property, or any general assignment for the benefit of creditors.
“ Event of Default ” shall have the meaning set forth in Section 8.1.
“ Financial Statements ” shall mean the consolidated balance sheet and statement of income and retained earnings of the Borrower and its Parent and Subsidiaries, if any, for any applicable period together with all related statements, schedules and notes, all in reasonable detail and stating in comparative form the respective figures for the corresponding date and period in the previous Fiscal Year and all prepared in conformity with GAAP (subject to in the case of interim statements to normal year-end audit adjustments).
“ Fiscal Quarter ” shall mean each fiscal quarter within Borrower’s Fiscal Year.
“ Fiscal Year ” shall mean the calendar year.
“ GAAP ” shall mean generally accepted accounting principles as in effect from time to time in the United States, consistently applied.
“ General Intangibles ” shall mean “general intangibles” as defined in the UCC and includes: contract rights; insurance refund claims; insurance claims and proceeds; tort claims and proceeds; tax refund claims and tax refunds; patents, trademarks, trade names, service marks, copyrights and applications for any of the foregoing; licenses, permits and agreements of any type, by which the Borrower now or hereafter uses, possesses or has authority to use or possess property of others, or by which others now or hereafter use, possess or have authority to use or possess any of the Borrower’s property; all licenses, permits and consents of any type; and all computer software, including source codes and documentation.
“ Guarantor(s) ” includes Paul Mathieson and the Parent of the Borrower or any entity that may hereafter guarantee the payment or collection of, or become accommodation parties with respect to, any portion of the Obligations.
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“ Guaranty ” shall mean, individually and collectively, the Parent Guaranty, the Mathieson Guaranty, and the IEGC Guaranty, each in a form and substance satisfactory to the Lender in its sole discretion.
“ Hazardous Substance(s) ” means any substance, material or waste that is or becomes designated or regulated as “toxic,” “hazardous,” “pollutant” or “contaminant” or a similar designation or regulation under any current or future federal, state or local Environmental Law (whether under common law, statute, regulation or otherwise) or judicial or administrative interpretation of such, including, without limitation, petroleum or natural gas.
“ IEGC Guaranty ” shall mean the Continuing and Unconditional Guaranty, dated of even date herewith, given by Investment Evolution Global Corporation, a Delaware corporation, in favor of the Lender
“ Includes ” and “ including ” are not limiting.
“ Indebtedness for Borrowed Money ” shall mean (a) all indebtedness, liabilities, and obligations, now existing or hereafter arising, for money borrowed by the Borrower or the Parent, whether or not evidenced by any note, mortgage, indenture, or agreement (including, without limitation, the Note and any indebtedness for money borrowed from an Affiliate), and (b) all indebtedness of others for money borrowed (including indebtedness of an Affiliate) with respect to which the Borrower, the Parent or any Affiliate has become liable by way of any direct or indirect guaranty or indemnity.
“ Interest Rate ” shall mean eighteen percent (18%) per annum; provided, however, in the event that the Applicable Percentage is permanently reduced by the election of the Borrower under this Agreement, the Interest Rate shall mean (a) sixteen percent (16%) if the Applicable Percentage is permanently reduced to eighty percent (80%) and (a) fourteen percent (14%) if the Applicable Percentage is permanently reduced to seventy percent (70%).
“ Inventory ” shall mean “inventory” as defined in the UCC, wherever located, now or hereafter owned or acquired by the Borrower or in which the Borrower now holds or hereafter acquires any interest, and in any event, shall include, without limitation, all inventory, goods and other personal property which are held by or on behalf of the Borrower for sale or lease or are furnished or are to be furnished under a contract of service or which constitute raw materials, work in process or materials used or consumed or to be used or consumed in the Borrower’s business, or the processing, packaging, promotion, delivery or shipping of the same, and all furnished goods whether or not such inventory is listed on any schedules, assignments or reports furnished to the Lender from time to time and whether or not the same is in transit or in the constructive, actual or exclusive occupancy or possession of the Borrower or is held by the Borrower or by others for the Borrower’s account, including, without limitation, all goods covered by purchase orders and contracts with suppliers and all goods billed and held by suppliers and all inventory which may be located on premises of the Borrower or of any carriers, forwarding agents, truckers, warehousemen, vendors, selling agents or other persons.
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“ Investment ” in any Person shall mean:
(a) the acquisition (whether for cash, property, services or securities or otherwise) of capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities of such Person; and
(b) any deposit with, or advance, loan or other extension of credit to, such Person (other than any such deposit, advance, loan or extension of credit having a term not exceeding 120 days in the case of unaffiliated Persons and one year in the case of Affiliates representing the purchase price of inventory or supplies purchased in the ordinary course of business) or guaranty or assumption of, or other contingent obligation with respect to, Indebtedness for Borrowed Money or other liability of such Person; and (without duplication of the amounts included in (a) and (b) above) any amount that may, pursuant to the terms of such investment, be required to be paid, deposited, advanced, lent or extended to or guaranteed or assumed on behalf of such Person.
“ Knowledge ” shall mean the actual knowledge of the Borrower or such knowledge that would have been acquired after reasonable inquiry.
“ Lien ” shall mean any lien, mortgage, security interest, chattel mortgage, pledge or other encumbrance (statutory or otherwise) of any kind securing satisfaction of an obligation, including any agreement to give any of the foregoing, any conditional sales or other title retention agreement, any lease in the nature thereof, and the filing of or the agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction or similar evidence of any encumbrance, whether within or outside the United States.
“ Loan ” shall mean the line of credit established in favor of the Borrower in the principal amount of Three Million and No/100 Dollars ($3,000,000.00) as evidenced by the Note.
“ Loan Account ” shall mean the deposit account of the Borrower with Wells Fargo Bank, N.A., Account No. 6097303587, or such other account as the Borrower may designate subject to (i) the approval of the Lender in its sole discretion and (ii) execution of a deposit account control agreement in favor of the Lender for such account.
“ Loan Documents ” shall mean this Agreement, the Note, the Guaranty, all agreements or other instruments creating a security interest in favor of the Lender, and each other agreement, document and instrument which now or hereafter evidence or secure any of the Obligations (including, without limitation, all guarantees), and any amendments, modifications or substitutions of or for the foregoing.
“ Material Adverse Effect ” shall mean a material adverse effect with respect to (a) the business, operations, assets, or condition (financial or otherwise) of the Borrower and its Parent or Subsidiaries, if any, taken as a whole, or (b) the validity or enforceability of this Agreement or any of the other Loan Documents or the rights and remedies of the Lender under this Agreement and the other Loan Documents.
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“ Mathieson Guaranty ” shall mean the Limited Guaranty, dated of even date herewith, given by Paul Mathieson in favor of the Lender
“ Maturity Date ” shall mean June 1, 2016.
“ Maximum Loan Amount ” means the maximum aggregate amount to be outstanding hereunder, which shall be calculated as the lesser of (a) the Revolving Credit Limit and (b) the sum of (i) the Applicable Percentage of the aggregate Eligible Consumer Loan Amounts for Consumer Loans set forth on the most recent Compliance Certificate delivered by the Borrower to the Lender and (ii) ninety-eight percent (98.0%) of cash held by the Borrower up to Two Hundred Thousand and No/100 Dollars ($200,000.00), or such lesser amount as may be advanced from time to time by the Lender hereunder.
“ Multiemployer Plan ” shall mean a multiemployer plan as defined in ERISA Section 4001(a)(3), which covers employees of the Borrower or any ERISA Affiliate.
“ Note ” shall mean that certain Promissory Note in the principal amount of Three Million and No/100 Dollars ($3,000,000.00), dated of even date herewith, executed and delivered by the Borrower to evidence the Loan, as such note may be amended, modified or supplemented from time to time.
“ Obligations ” shall mean all indebtedness, obligations and liabilities of the Borrower to the Lender of every kind and description, direct or indirect, secured or unsecured, joint or several, absolute or contingent, due or to become due, including any overdrafts, whether for payment or performance, now existing or hereafter arising, whether presently contemplated or not, regardless of how the same arise, or by what instrument, agreement or book account they may be evidenced, or whether evidenced by any instrument, agreement or book account, including, but not limited to, all loans (including any loan by modification, renewal or extension), all indebtedness, including any arising from any derivative transactions, all undertakings to take or refrain from taking any action, all indebtedness, liabilities or obligations owing from the Borrower to others which the Lender may have obtained by purchase, negotiation, discount, assignment or otherwise; and all interest, taxes, fees, charges, expenses and attorney’s fees (whether or not such attorney is a regularly salaried employee of the Lender, any parent corporation or any Subsidiary or Affiliate of the Lender, whether now existing or hereafter created) chargeable to the Borrower or incurred by the Lender under this Agreement, any Loan Document or any other document or instrument delivered in connection with this Agreement or otherwise.
“ Outstanding Loan Balance ” means the amount of all Obligations in connection with the Loan outstanding at any given time and pursuant to this Agreement, but excluding any interest, fees or charges not yet due.
“ Parent ” shall mean Investment Evolution Corporation, a Delaware corporation.
“ Parent Guaranty ” shall mean the Continuing and Unconditional Guaranty, dated of even date herewith, given by the Parent in favor of the Lender .
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“ Pension Plan ” shall mean, at any time, any Employee Benefit Plan or a Multiemployer Plan, the funding requirements of which (under ERISA Section 302 or Code Section 412) are, or at any time within the six (6) years immediately preceding the time in question, were in whole or in part, the responsibility of the Borrower or any ERISA Affiliate.
“ Permitted Liens ” shall mean:
(1) any Liens for current taxes, assessments and other governmental charges not yet due and payable or being contested in good faith by the Borrower or any Subsidiary by appropriate proceedings and for which adequate reserves have been established by the Borrower or the Subsidiary as reflected in the Borrower’s or the Subsidiary’s Financial Statements;
(2) any mechanic’s, materialman’s, carrier’s, warehousemen’s or similar Lien for sums not yet due or being contested in good faith by the Borrower by appropriate proceedings and for which adequate reserves have been established by the Borrower or the Subsidiary as reflected in the Borrower’s or the Subsidiary’s Financial Statements;
(3) easements, rights-of-way, restrictions and other similar encumbrances on the real property or fixtures of the Borrower incurred in the ordinary course of business which individually or in the aggregate are not substantial in amount and which do not in any case materially detract from the value or marketability of the subject property or interfere with the ordinary conduct of the business of the Borrower or the Subsidiary;
(4) any Lien (other than a Lien imposed on any property of the Borrower or any ERISA Affiliate pursuant to ERISA or section 412 of the Code) incurred in the ordinary course of business, including any Lien in connection with workers’ compensation, unemployment insurance and other types of social security and any Lien to secure performance of tenders, statutory obligations, surety and appeal bonds (in the case of appeal bonds the Lien shall not secure any reimbursement or indemnity obligation in an amount greater than Ten Thousand Dollars ($10,000.00)), bids, leases that are not Capitalized Leases, performance bonds, sales contracts and other similar obligations, in each case, not incurred in connection with the obtaining of credit or the payment of a deferred purchase price, and which do not, in the aggregate, result in a Material Adverse Effect; and
(5) any Lien existing on the date of this Agreement and set forth in Schedule 4 . 13 .
“ Person ” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, company, trust, business trust, entity, and any other entity of whatever nature, government, governmental agency or political subdivision.
“ Potential Default ” shall mean an event, condition or circumstance that with the giving of notice or lapse of time or both would become an Event of Default.
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“ Proceeds ” shall mean all cash and non-cash “proceeds” as defined in the UCC, and includes (a) proceeds of any insurance, indemnity, warranty or guaranty payable to the Lender or the Borrower from time to time with respect to any Collateral, (b) payments in any form made or due and payable to the Lender or the Borrower in connection with any requisition, confiscation, condemnation, seizure or forfeiture of any Collateral or any Proceeds of any Collateral, and (c) all other amounts paid or payable under or in connection with any Collateral.
“ Profit Sharing Agreement ” shall mean an agreement between the Lender, the Borrower and the Parent, in form and substance satisfactory to the Lender and secured by the assets of the Borrower, providing, among other things, that (i) 20% of the net profits of the Borrower are paid to the Lender, unless a Refinance Event has occurred, whereupon 10% of the net profits of the Borrower are paid to the Lender provided that the Borrower may terminate such profit sharing with a payment of Five Hundred Thousand and No/100 Dollars ($500,000.00) within one (1) year from the Closing Date, a payment of One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00) between the end of the first year and end of the second year following the Closing Date, and a payment of Three Million and No/100 Dollars ($3,000,000.00) thereafter, and (ii) the Lender shall have the right participate in any debt or equity raised by the Borrower, the Parent or any Affiliate thereof with such right expiring one (1) year after repayment in full of the Loan.
“ Prohibited Transaction ” shall mean a transaction that is prohibited under Code Section 75 or ERISA Section 406 and not exempt under Code Section 4975 or ERISA Section 408.
“ Refinance Event ” means prior to the Term Conversion Date, the Borrower obtaining a senior credit facility from a lender, with terms and conditions acceptable to the Lender in its sole direction, in an amount equal to or exceeding Five Million and No/100 Dollars ($5,000,000.00) that repays and modifies the Loan to permanently reduce the Revolving Credit Limit to One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00) or less and sets the Interest Rate to no less than eighteen (18%) percent.
“ Regulation ” shall mean any statute, law, ordinance, regulation, order or rule of the United States or any foreign, state, local, or other government or governmental body, including, without limitation, those covering or related to banking, financial transactions, public utilities, environmental control, energy, safety, health, transportation, bribery, record keeping, zoning, antidiscrimination, antitrust, wages and hours, employee benefits, and price and wage control matters.
“ Reportable Event ” shall mean, with respect to a Pension Plan: (a) any of the events set forth in ERISA Sections 4043(b) or 4063(a) or the regulations thereunder; (b) an event requiring the Borrower, any Subsidiary or any ERISA Affiliate to provide security to a Pension Plan under Code Section 401(a)(29); and (c) any failure by the Borrower, any Subsidiary or any ERISA Affiliate to make payments required by Code Section 412(m).
“ Revolving Credit Limit ” shall mean Three Million and No/100 Dollars ($3,000,000.00).
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“ Solvent ” shall mean, with respect to any Person that the aggregate present fair saleable value of the Person’s assets is in excess of the total amount of its probable liability on its existing debts as they become absolute and matured, the Person has not incurred debts beyond its foreseeable ability to pay the debts as they mature, and the Person has capital adequate to conduct the business it is presently engaged in or is about to engage in.
“ Subsidiary ” shall mean a corporation or other entity the shares of stock or other equity interests of which having ordinary voting power (other than stock having voting power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of the corporation or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries or both, by the Borrower, the Parent or any Affiliate.
“ Taxes ” shall have the meaning set forth in Section 9.8 of this Agreement.
“ Termination Event ” shall mean, with respect to a Pension Plan: (a) a Reportable Event; (b) the termination of a Pension Plan, or the filing of a notice of intent to terminate a Pension Plan, or the treatment of a Pension Plan amendment as a termination under ERISA Section 4041(c); (c) the institution of proceedings to terminate a Pension Plan under ERISA Section 4042; or (d) the appointment of a trustee to administer any Pension Plan under ERISA Section 4042.
“ Term Conversion Date ” shall mean December 1, 2013.
“ UCC ” shall mean the Uniform Commercial Code as in effect on the date of this Agreement in the State of Florida.
1.2 Accounting Terms . All accounting terms not specifically defined in this Agreement shall be construed in accordance with GAAP and all financial data submitted pursuant to this Agreement shall be prepared in accordance with GAAP.
2. THE REVOLVING LINE OF CREDIT .
2.1 The Revolving Line of Credit .
(a) Subject to the terms and conditions of this Agreement and in reliance upon the representations, warranties and covenants contained in this Agreement, the Lender agrees to provide a line of credit to the Borrower in an amount equal to the Maximum Loan Amount during the Availability Period. The Loan shall be evidenced by the Note, which Borrower shall execute and deliver to the Lender at Closing. All advances to Borrower by the Lender under the Note shall be made by the Lender by deposit to the Loan Account.
(b) The proceeds from the Loan shall be used to finance Borrower’s purchase of Consumer Loans from its Parent pursuant to and in accordance with the terms of the Approved Purchase Agreement; provided, however , proceeds from the Loan may be distributed by the Borrower to the Parent for payment of operating costs so long as (i) such distribution shall not cause the Outstanding Loan Balance to exceed the Maximum Loan Amount and (ii) no Event of Default has occurred under the Loan Documents or will occur based on such distribution. The proceeds of the Loan shall not be used for any acquisition, consolidation, merger, reorganization or similar type of transaction with any Person without the Lender’s prior written consent.
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2.2 Availability Period . Provided that no Event of Default shall exist or be continuing, during the Availability Period, and upon five (5) Business Days’ prior written notice to the Lender, proceeds may be disbursed by the Lender to the Borrower under the Note, repaid by the Borrower, and, upon five (5) Business Days’ prior written notice to the Lender, re-borrowed by the Borrower under the Note until the Term Conversion Date; provided, however , that the Borrower shall not be entitled to borrow under the Note, and the Lender shall not be obligated to advance funds to the Borrower, more than one (1) time per thirty (30) day period and unless the Borrower has delivered a Compliance Certificate to the Lender within five (5) days prior to such advance. All advances under this Agreement shall be a minimum amount of Twenty Five Thousand and No/100 Dollars ($25,000.00) and not more than Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00).
2.3 Conversion to Term Loan . Unless this Agreement shall be terminated sooner as provided herein, the line of credit shall automatically convert to a term loan on the Term Conversion Date pursuant to the terms of the Note.
2.4 Interest .
(a) Interest shall accrue on the outstanding principal balance of the Loan at the Interest Rate, calculated on the basis of actual number of days elapsed in a year of 360 days.
(b) The Borrower shall not be obligated to pay and the Lender shall not collect interest on any Obligations at a rate in excess of the maximum permitted by law or the maximum that will not subject Lender to any civil or criminal penalties. If, because of the acceleration of maturity, the payment of interest in advance or any other reason, Borrower is required, under the provisions of any Loan Document or otherwise, to pay interest at a rate in excess of such maximum rate, the rate of interest under such provisions shall immediately and automatically be reduced to such maximum rate, and any payment made in excess of such maximum rate, together with interest thereon at the rate provided herein from the date of such payment, shall be immediately and automatically applied to the reduction of the unpaid principal balance of the Obligations as of the date on which such excess payment was made. If the amount to be so applied to reduction of the unpaid principal balance exceeds the unpaid principal balance, the amount of such excess shall be refunded by the Lender to the Borrower.
2.5 Payment . The Borrower shall repay the Loan as follows:
(a) Commencing on July 1, 2012, and continuing on the same day of each and every calendar month thereafter through and including the month in which the Term Conversion Date occurs, payments of accrued and unpaid interest on the then outstanding principal balance of the Loan shall be due and payable in full.
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(b) Commencing on January 1, 2014 and continuing on the same day of each and every calendar month thereafter through and including the month in which the Maturity Date occurs, payments of one hundred percent (100%) of the Consumer Loan Proceeds shall be applied to accrued and unpaid interest and the outstanding principal balance of the Loan.
(c) On the Maturity Date, the Borrower shall pay the outstanding principal and interest balance of the Loan, together with any costs, fees and expenses, without the need for future notice or demand.
2.6 ACH Transactions . The Borrower hereby irrevocably authorizes the Lender, in its sole and exclusive discretion, to debit via ACH Transaction from the Loan Account any amount due and payable hereunder or under any other Loan Document. The Borrower acknowledges that any notice requirement to effect an ACH Transaction is satisfied by the Borrower’s notice of the time periods set forth in this Agreement, including, without limitation, those set forth in Section 2.5, except that if no Event of Default has occurred, the Lender shall provide the Borrower three (3) days notice prior to an ACH Transaction. All payments shall be applied to the Obligations in such manner as the Lender determines in its sole and absolute discretion. All payments constituting proceeds of the Collateral and other payments received by the Lender will be immediately applied to the repayment of the Obligations then due (such credit being provisional until the Lender’s receipt of collected funds); provided that, in the event of any delay in the processing and/or receipt by the Lender of such payment, interest shall continue to accrue until the Lender’s actual receipt of such funds. The Borrower further agrees to execute such other agreements and authorizations that the Lender may request from time to time to allow the Lender to exercise its rights under this Section 2.6.
2.7 Payment on Non-Business Days . Whenever any payment due the Lender hereunder or under any other Loan Document shall be stated to be due on a day other than a Business Day, such payment shall be made by the Borrower (or withdrawn from the Loan Account in the Lender’s sole and exclusive discretion) on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest.
2.8 Overadvance . If at any time the Outstanding Loan Balance shall exceed the Maximum Loan Amount, the Borrower shall, without demand or notice, immediately pay to the Lender such amount as may be necessary to eliminate such excess.
2.9 Loan Prepayments . The Outstanding Loan Balance may be prepaid in whole or in part at any time without penalty.
2.10 Refinance Event . Upon the occurrence of a Refinance Event, and provided an Event of Default has not occurred, the Lender agrees to subordinate its security interest in the Loans to the senior lender and modify the maturity date of the Loan to match the maturity date of the senior facility on the condition that (a) such facility allows for the Borrower to make regular monthly payments of accrued interest to the Lender, and (b) this Agreement shall be amended to provide, among other things, that it shall constitute an Event of Default if the total of the remaining principal amount of the Loan together with the outstanding amount of such facility exceeds ninety-five percent (95.0%) of all Eligible Consumer Loan Amounts.
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2.11 Fees .
(a) Draw Fee . The Borrower agrees to pay the Lender a draw fee equal to one percent (1.0%) of the amount of any advance of funds under this Agreement.
(b) Field Exam Costs . The Borrower agrees to reimburse the Lender for the cost of periodic field examinations of the Borrower’s books, records and the Collateral, at such intervals as the Lender may require, not to exceed an annual cost of Five Thousand and No/100 Dollars ($5,000.00). The actions described in this paragraph may be performed by employees of the Lender or by independent agents or reviewers.
(c) Late Fee . In the event that any payment of principal and/or interest due to the Lender is not received by the Lender on or before the tenth (10th) day after its due date, the Borrower shall pay to the Lender, immediately, without notice or demand, a late charge in an amount equal to the greater of Two-Thousand Five Hundred and No/100 Dollars ($2,500.00) or one-tenth (1/10th) of one percent (1%) of the unpaid principal balance as of the date the late charge is assessed for the purpose of defraying the costs incident to the processing and handling of the delinquent payment. The provision for such late charge shall not be construed to permit the Borrower to make any payment after its due date, obligate the lender to accept any overdue installment, or affect the Lender’s rights and remedies upon the occurrence of an Event of Default.
2.12 Documentary Stamp Tax . The Borrower agrees to defend, indemnify and hold the Lender harmless from and against any and all liability for documentary excise taxes and intangible taxes (together with all interest, penalties, costs and reasonable attorneys’ fees incurred in connection therewith) that at any time may be levied, assessed or imposed by the State of Florida or any other governmental authority (a) upon the Note, this Agreement or any of the other Loan Documents, (b) upon any amendment, extension or renewal of any of the foregoing, or (c) upon the Lender by virtue of owning or holding any of the foregoing documents or instruments; all of which shall be secured by the security interest or other Lien granted by this Agreement. The provisions of this section survive the repayment of the Note and the termination of this Agreement or any of the other Loan Documents for so long as any claim may be asserted by the State of Florida or any other governmental authority.
3. COLLATERAL .
3.1 Collateral . As security for the payment of the Obligations and the satisfaction by the Borrower of all covenants and undertakings contained in this Agreement and the other Loan Documents, the Borrower hereby pledges, assigns and grants to the Lender, a continuing first priority lien on and security interest in, the Collateral.
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3.2 Authorization to File Financing Statements . The Borrower hereby irrevocably authorizes the Lender at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that (a) indicate the Collateral (i) as all assets of the Borrower or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the Uniform Commercial Code of the State of Florida or such jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail, and (b) provide any other information required by part 5 of Article 9 of the Uniform Commercial Code of the State, or such other jurisdiction, for the sufficiency or filing office acceptance of any financing statement or amendment, including (i) whether the Borrower is an organization, the type of organization and any organizational identification number issued to the Borrower, and (ii) in the case of a financing statement filed as a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a sufficient description of the real property to which the Collateral relates. The Borrower agrees to furnish any such information to the Lender promptly upon the Lender’s request.
3.3 Other Actions . To further the attachment, perfection and first priority of, and the ability of the Lender to enforce, the Lender’s security interest in the Collateral, and without limitation on the Borrower’s other obligations in this Agreement, the Borrower agrees, in each case at the Borrower’s expense, to take the following actions with respect to the following Collateral:
(a) Promissory Notes and Tangible Chattel Paper . If the Borrower shall at any time hold or acquire any promissory notes in excess of Ten Thousand Dollars and No/100 ($10,000.00) or tangible chattel paper, the Borrower shall forthwith endorse, assign and deliver the same to the Lender, accompanied by such instruments of transfer or assignment duly executed in blank as the Lender may from time to time specify.
(b) Deposit Accounts . For each deposit account that the Borrower at any time opens or maintains, the Borrower shall, at the Lender’s request and option, pursuant to an agreement in form and substance satisfactory to the Lender, either (i) cause the depository bank to comply at any time with instructions from the Lender to such depository bank directing the disposition of funds from time to time credited to such deposit account, without further consent of the Borrower, or (ii) arrange for the Lender to become the customer of the depository bank with respect to the deposit account, with the Borrower being permitted, only with the consent of the Lender, to exercise rights to withdraw funds from such deposit account. The provisions of this paragraph shall not apply to (A) any deposit account for which the Borrower, the depository bank and the Lender have entered into a cash collateral agreement specially negotiated among the Borrower, the depository bank and the Lender for the specific purpose set forth therein, (B) a deposit account for which the Lender is the depository bank and is in automatic control, and (C) deposit accounts specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of the Borrower’s salaried employees.
(c) Investment Property . If the Borrower shall at any time hold or acquire any certificated securities, the Borrower shall forthwith endorse, assign and deliver the same to the Lender, accompanied by such instruments of transfer or assignment duly executed in blank as the Lender may from time to time specify. If any securities now or hereafter acquired by the Borrower are uncertificated and are issued to the Borrower or its nominee directly by the issuer thereof, the Borrower shall immediately notify the Lender thereof and, at the Lender’s request and option, pursuant to an agreement in form and substance satisfactory to the Lender, either (1) cause the issuer to agree to comply with instructions from the Lender as to such securities, without further consent of the Borrower or such nominee, or (2) arrange for the Lender to become the registered owner of the securities. If any securities, whether certificated or uncertificated, or other investment property now or hereafter acquired by the Borrower are held by the Borrower or its nominee through a securities intermediary or commodity intermediary, the Borrower shall immediately notify the Lender thereof and, at the Lender’s request and option, pursuant to an agreement in form and substance satisfactory to the Lender, either (i) cause such securities intermediary or (as the case may be) commodity intermediary to agree to comply with entitlement orders or other instructions from the Lender to such securities intermediary as to such securities or other investment property, or (as the case may be) to apply any value distributed on account of any commodity contract as directed by the Lender to such commodity intermediary, in each case without further consent of the Borrower or such nominee, or (ii) in the case of financial assets or other investment property held through a securities intermediary, arrange for the Lender to become the entitlement holder with respect to such investment property, with the Borrower being permitted, only with the consent of the Lender, to exercise rights to withdraw or otherwise deal with such investment property. The provisions of this paragraph shall not apply to any financial assets credited to a securities account for which the Lender is the securities intermediary.
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(d) Collateral in the Possession of a Bailee . If any Collateral is at any time in the possession of a bailee, the Borrower shall promptly notify the Lender thereof and, at the Lender’s request and option, shall promptly obtain an acknowledgement from the bailee, in form and substance satisfactory to the Lender, that the bailee holds such Collateral for the benefit of the Lender, and that such bailee agrees to comply, without further consent of the Borrower, with instructions from the Lender as to such Collateral.
(e) Electronic Chattel Paper and Transferable Records . If the Borrower at any time holds or acquires an interest in any electronic chattel paper or any “transferable record,” as that term is defined in Section 201 of the federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, the Borrower shall promptly notify the Lender thereof and, at the request and option of the Lender, shall take such action as the Lender may reasonably request to vest in the Lender control, under Section 9-105 of the Uniform Commercial Code, of such electronic chattel paper or control under Section 201 of the federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record.
(f) Letter-of-Credit Rights . If the Borrower is at any time a beneficiary under a letter of credit, the Borrower shall promptly notify the Lender thereof and, at the request and option of the Lender, the Borrower shall, pursuant to an agreement in form and substance satisfactory to the Lender, either (1) arrange for the issuer and any confirmer or other nominated person of such letter of credit to consent to an assignment to the Lender of the proceeds of the letter of credit, or (2) arrange for the Lender to become the transferee beneficiary of the letter of credit, with the Lender agreeing, in each case, that the proceeds of the letter to credit are to be applied as provided in this Agreement.
(g) Commercial Tort Claims . If the Borrower shall at any time hold or acquire a commercial tort claim, the Borrower shall immediately notify the Lender in a writing signed by the Borrower of the particulars thereof and grant to the Lender in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to the Lender.
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(h) Other Actions as to Any and All Collateral . The Borrower further agrees, at the request and option of the Lender, to take any and all other actions the Lender may determine to be reasonably necessary or useful for the attachment, perfection and first priority of, and the ability of the Lender to enforce, the Lender’s security interest in any and all of the Collateral, including, without limitation, (1) executing, delivering and, where appropriate, filing financing statements and amendments relating thereto under the Uniform Commercial Code, to the extent, if any, that the Borrower’s signature thereon is required therefor, (2) causing the Lender’s name to be noted as Lender on any certificate of title for a titled good if such notation is a condition to attachment, perfection or priority of, or ability of the Lender to enforce, the Lender’s security interest in such Collateral, (3) complying with any provision of any statute, regulation or treaty of the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of the Lender to enforce, the Lender’s security interest in such Collateral, (4) obtaining governmental and other third party waivers, consents and approvals in form and substance satisfactory to Lender, including, without limitation, any consent of any licensor, lessor or other person obligated on Collateral, (5) obtaining waivers from mortgagees and landlords in form and substance satisfactory to the Lender, and (6) taking all actions under any earlier versions of the Uniform Commercial Code or under any other law, as reasonably determined by the Lender to be applicable in any relevant Uniform Commercial Code or other jurisdiction, including any foreign jurisdiction.
(i) Filing Security Agreement . A carbon, photographic or other reproduction or other copy of this Agreement or of a financing statement is sufficient as and may be filed in lieu of a financing statement.
3.4 Power of Attorney .
(a) Appointment and Powers of Lender . The Borrower hereby irrevocably constitutes and appoints the Lender and any officer or agent thereof, with full power of substitution, as its true and lawful attorneys-in-fact with full irrevocable power and authority in the place and stead of the Borrower or in the Lender’s own name, without notice to or assent by the Borrower, to do the following:
(i) upon the occurrence and during the continuance of an Event of Default, generally to sell, transfer, pledge, make any agreement with respect to or otherwise dispose of or deal with any of the Collateral in such manner as is consistent with the Uniform Commercial Code of Florida and as fully and completely as though the Lender were the absolute owner thereof for all purposes, and to do, at the Borrower’s expense, at any time, or from time to time, all acts and things which the Lender deems necessary or useful to protect, preserve or realize upon the Collateral and the Lender’s security interest therein, in order to effect the intent of this Agreement, all at least as fully and effectively as the Borrower might do, including, without limitation, (A) the filing and prosecuting of registration and transfer applications with the appropriate federal, state, local or other agencies or authorities with respect to trademarks, copyrights and patentable inventions and processes, (B) upon written notice to the Borrower, the exercise of voting rights with respect to voting securities, which rights may be exercised, if the Lender so elects, with a view to causing the liquidation of assets of the issuer of any such securities, and (C) the execution, delivery and recording, in connection with any sale or other disposition of any Collateral, of the endorsements, assignments or other instruments of conveyance or transfer with respect to such Collateral; and
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(ii) to the extent that the Borrower’s authorization given in Section 3.2 is not sufficient, to file such financing statements with respect hereto, with or without the Borrower’s signature, or a photocopy of this Agreement in substitution for a financing statement, as the Lender may deem appropriate and to execute in the Borrower’s name such financing statements and amendments thereto and continuation statements which may require the Borrower’s signature.
(b) Ratification by Borrower . To the extent permitted by law, the Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and is irrevocable.
(c) No Duty on Lender . The powers conferred on the Lender hereunder are solely to protect its interests in the Collateral and shall not impose any duty upon it to exercise any such powers. The Lender shall be accountable only for the amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to the Borrower for any act or failure to act, except for the Lender’s own gross negligence or willful misconduct.
4. REPRESENTATIONS AND WARRANTIES .
To induce the Lender to enter into this Agreement, the Borrower represents and warrants to the Lender as follows:
4.1 Organization and Qualification . The Borrower is duly formed, validly existing and in good standing as a limited liability company under the laws of the State of Delaware, and is duly qualified as a limited liability company and in good standing under the laws of each jurisdiction in which the conduct of its business or the ownership of its assets requires such qualification.
4.2 Authority and Authorization . Each of the Borrower and the Parent has corporate power and authority to execute, deliver and perform under the Loan Documents to which it is a party, to make the borrowings provided for in this Agreement, and to perform its obligations under the Loan Documents, and all such action has been duly and validly authorized by all necessary corporate action on its part. No consent of any other party (including stockholders of the Borrower and the Parent) and no consent, license, approval or authorization of, or registration or declaration with, any governmental authority, bureau or agency is required in connection with the execution, delivery, performance, validity or enforceability of the Loan Documents.
4.3 Execution and Binding Effect . The Loan Documents to which the Borrower or the Parent is a party have been duly and validly executed and delivered by the Borrower and the Parent, as applicable, and constitute legal, valid and binding obligations of the Borrower or the Parent, enforceable in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights. Each Guaranty has been duly and validly executed and delivered by the Guarantors and constitutes the legal, valid and binding obligation of the Guarantors, enforceable in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights.
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4.4 Litigation . There are no judgments, actions, suits or proceedings pending or, to the Borrower’s knowledge, threatened against or affecting the Borrower or the Parent or any assets of the Borrower or the Parent before any court, governmental agency or other tribunal which if adversely determined reasonably could have a Material Adverse Effect or affect the ability of the Borrower or the Parent to perform under the Loan Documents.
4.5 Conflict with Other Instruments . The execution and delivery of, and performance under, the Loan Documents will not violate or contravene any provision of any existing law or regulation or decree of any court, governmental authority, bureau or agency having jurisdiction over the Borrower or the Parent or of any mortgage, indenture, security agreement, contract, undertaking or other agreement to which the Borrower or the Parent is a party or which purports to be binding upon it or any of its properties or assets, and will not result in the creation or imposition of any Lien, charge, encumbrance on, or security interest in, any of its properties or assets pursuant to the provisions of any such mortgage, indenture, security agreement, contract, undertaking or other agreement.
4.6 Not in Default; Judgments, Etc . No Event of Default or Potential Default under any Loan Document has occurred and is continuing. Each of the Borrower and the Parent has satisfied all judgments and neither the Borrower nor the Parent is in default under or in violation of any material existing agreement or any judgment, writ, injunction, decree, rule, or regulation of any court, arbitrator, or federal, state, municipal, or other governmental authority, commission, board bureau, agency, or instrumentality, domestic or foreign.
4.7 Permits, Licenses, Etc . Each of the Borrower and the Parent possesses all permits, licenses, franchises, trademarks, trade names, copyrights and patents necessary to the conduct of its business as presently conducted or as presently proposed to be conducted without conflict to the rights of others. Each of the Borrower and the Parent owns or has a valid right to use the patents, patent rights, permits, licenses, trade secrets, trademarks, trademark rights, trade names or trade name rights or franchises, copyrights, inventions, and intellectual property rights being used to conduct its business as now operated and as now contemplated to be operated (a complete list of which rights is attached hereto as Schedule 4 . 7 ); and the conduct of the business of the Borrower and the Parent as now operated and as now proposed to be operated does not and will not conflict with valid patents, patent rights, permits, licenses, trade secrets, trademarks, trademark rights, trade names or trade name rights or franchises, copyrights, inventions, and intellectual property rights of others. No claim is pending or threatened to the effect that any such intellectual property owned or licensed by the Borrower or the Parent or which the Borrower or the Parent otherwise has the right to use, is invalid or unenforceable by the Borrower or the Parent, as the case may be. Each of the Borrower and the Parent does not have any obligation to compensate any Person for the use of any such patents or rights, and no Person has been granted any license or other rights to use in any manner any of the patents or rights of the Borrower or the Parent, whether requiring the payment of royalties or not.
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4.8 Labor . Each of t he Borrower and the Parent is not involved in any strike, lock-out, boycott or any other labor trouble, similar or dissimilar, nor is it involved in labor negotiations.
4.9 Fictitious Names . Each of t he Borrower and the Parent does not operate or do business, and has not operated or done business during the five (5) year period immediately preceding the Closing Date, under any assumed, trade or fictitious names except for the fictious name “Mr. Amazing Loans”.
4.10 Compliance with Laws .
(a) Compliance . Each of t he Borrower and the Parent is in compliance in all material respects with all Regulations applicable to its business (including obtaining all authorizations, consents, approvals, orders, licenses, exemptions from, and making all filings or registrations or qualifications with, any court or governmental department, public body or authority, commission, board, bureau, agency, or instrumentality), the noncompliance with which reasonably could have a Material Adverse Effect.
(b) Hazardous Wastes, Substances and Petroleum Products .
(i) Each of the Borrower and the Parent (A) has received all permits and filed all notifications necessary to carry on its business, and (B) is in compliance in all respects with all Environmental Laws.
(ii) Neither the Borrower nor the Parent has given any written or oral notice, nor has either failed to give required notice, to the Environmental Protection Agency (“ EPA ”) or any state or local agency with regard to any actual or imminently threatened release of Hazardous Substances on properties owned, leased or operated by the Borrower or the Parent or used in connection with the conduct of their business and operations.
(iii) Neither the Borrower nor the Parent has received notice that it is potentially responsible for costs of clean-up or remediation of any actual or imminently threatened release of Hazardous Substances pursuant to any Environmental Laws.
(iv) No real property owned or leased by the Borrower or the Parent is in violation of any Environmental Laws, no Hazardous Materials are present on said real property and neither the Borrower nor the Parent has been identified in any litigation, administrative proceedings or investigation as a responsible party for any liability under any Environmental Laws.
(c) Anti-Terrorism Laws .
(i) Each of the Borrower and the Parent (or any Affiliate thereof) is not in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.
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(ii) Each of the Borrower and the Parent (or any Affiliate thereof), or to such entity’s knowledge, any of its agents acting or benefiting in any capacity in connection with the Loan or other transactions under this Agreement, is any of the following (each a “ Blocked Person ”): (A) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; (B) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; (C) a Person with which the Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; (D) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order No. 13224; (E) a Person that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list; or (F) a Person who is affiliated with a Person listed above.
(iii) Neither the making of the Loan hereunder nor the use of the proceeds thereof will violate the PATRIOT Act, the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto. The Borrower is in compliance in all material respects with the PATRIOT Act.
4.11 Solvency . The Borrower and the Parent (on a consolidated basis), is and after giving effect to the transactions contemplated by this Agreement, will be, Solvent.
4.12 No Burdensome Agreements . Neither the Borrower nor the Parent is a party to or bound by any agreement or instrument or subject to any corporate or other restriction, the performance or observance of which now has or, as far as the Borrower or the Parent can reasonably foresee, may have a Material Adverse Effect.
4.13 Title; Liens . Except as otherwise disclosed in Schedule 4 . 13 , the Borrower has good and marketable title to and indefeasible ownership interests in, all of its property and assets, free and clear of any Lien. Schedule 4 . 13 sets forth and describes in reasonable detail each Lien in existence with regard to the property and assets of the Borrower. The Borrower will defend its property and assets against all claims and demands of any Person at any time claiming an interest in any of the Borrower’s property and assets. All Inventory is and shall at all times be of good and merchantable quality, free from all defects, and all other Collateral is and shall remain in good working order and repair. No Collateral is affixed to real estate, or an accession to other goods or part of a product or mass.
4.14 Disclosure Generally . The written representations and statements made by or on behalf of each of t he Borrower and the Parent in connection with this Agreement, including representations and statements in each of the Loan Documents, do not contain any untrue statement of a material fact or omit to state a material fact or any fact necessary to make the representations made not materially misleading. No written information, exhibit, report or financial statement furnished each of the Borrower and the Parent to the Lender in connection with this Agreement, or any other Loan Document, contains any material misstatement of fact or omits to state a material fact or any fact necessary to make the statements contained therein not materially misleading.
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4.15 Account Debtors . All Account Debtors are, to the extent permitted by law, precluded from asserting against the Lender any claims or defenses they have against sellers. No Account Debtor is a governmental authority subject to the Federal Assignment of Claims Act.
4.16 Collateral . (a) The Borrower is the owner of the Collateral, free from any right or claim or any person or any adverse lien, security interest or other encumbrance, except for the security interest created by this Agreement, (b) none of the Collateral constitutes, or is the proceeds of, “farm products” as defined in Section 9102(a)(34) of the UCC, (c) none of the Account Debtors or other persons obligated on any of the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or like federal, state or local statute or rule in respect of such Collateral, (d) the Borrower holds no commercial tort claims, and (e) the Borrower has at all times operated its business in compliance with all applicable provisions of the federal Fair Labor Standards Act, as amended, and with all applicable provisions of federal, state and local statutes and ordinances dealing with the control, shipment, storage or disposal of hazardous materials or substances.
4.17 Advances . Each request for a Loan advance under this Agreement, without a further writing of any kind, constitutes (a) an affirmation by Borrower that all of the representations and warranties of Borrower in this Section 4 remain true and correct as of the date thereof and, unless the Lender is notified in writing to the contrary prior to the disbursement of the requested Loan advance, will be true and correct on the date thereof, and (b) a representation and warranty that the information set forth in each such request in accordance with the requirements of this Agreement is true and correct.
5. CONDITIONS PRECEDENT .
5.1 Conditions to Disbursement . The following conditions precedent shall be completely satisfied prior to the first advance of Loan proceeds and any subsequent advance under this Agreement, which conditions precedent inure solely to the benefit of and may be waived only in writing by the Lender:
(a) Certificate of Formation; Limited Liability Company . The Lender shall have received copies of the Managing Member’s Certificate of the Borrower, together with a Certificate of Good Standing from any jurisdiction where the nature of its business or the ownership of its assets requires such qualification except where the failure to be so qualified would not have a Material Adverse Effect and any certificates of incorporation, by-laws and other corporate documents from the Parent and any Affiliate as Lender shall reasonably require. The Managing Member’s Certificate shall contain copies of the Certificate of Formation of the Borrower and the Limited Liability Agreement of the Borrower.
(b) Evidence of Authorization . The Lender shall have received copies certified by the Managing Member of the Borrower (or other appropriate officer) and each Person other than the Lender who is a party to any Loan Document of all corporate resolutions or other action taken to authorize its execution and delivery and performance of the Loan Documents or any other documents required hereby, together with such other related papers as the Lender shall reasonably require.
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(c) Evidence of Insurance . The Borrower shall deliver to Lender evidence of insurance and payment of all premiums, satisfactory to Lender in its sole discretion, as to each policy of insurance required to be maintained by Borrower under Section 6.5(a) of this Agreement.
(d) Loan Documents . The Lender shall have received the fully executed original Loan Documents. In addition, the Lender shall have received all certificates, instruments and other documents then required to be delivered pursuant to any Loan Documents, in each instance in form and substance reasonably satisfactory to the Lender.
(e) Consents . The Borrower shall have provided to the Lender evidence satisfactory to the Lender that all governmental, shareholder and third party consents and approvals necessary in connection with the transactions contemplated by this Agreement have been obtained and remain in effect including, without limitation, a consent from the Borrower’s landlord in form and substance satisfactory to the Lender.
(f) Change . No Material Adverse Effect shall have occurred.
(g) Financing Statements . All financing statements necessary to perfect the Lender’s security interest in the Collateral shall have been filed and all other action necessary to perfect the Lender’s security interest shall have been taken.
(h) FirstACH . The Lender shall have received satisfactory evidence, as determined in its sole discretion, establishing that FirstACH has received irrevocable instructions and agreed to deposit all proceeds from Consumer Loan into the Collection Account.
(i) Loan Account . The Lender shall have received (i) satisfactory evidence, as determined in its sole discretion, establishing the Lender as a co-signer on the Loan Account and (ii) an amended signature card for the Loan Account fully completed and executed by the Borrower establishing the Lender as the sole signatory on the Loan Account.
(j) Profit Sharing Agreement . The Lender shall have received fully executed originals of the Profit Sharing Agreement with the Borrower, the Parent and Investment Evolution Global Corporation, a Delaware corporation, and any related agreement required by the same.
(k) Operating Agreement . The Lender shall have fully executed copies of the Approved Operating Agreement.
(l) Independent Manager . The Lender shall have received satisfactory evidence, as determined in its sole discretion, establishing that Borrower has entered into an agreement to appoint John P. Barber, Jr. as an independent manager of the Borrower under the Approved Operating Agreement.
(m) Consumer Loan Purchase Documents . The Lender shall have received fully executed copies of the Approved Purchase Agreement and the Approved Servicing Agreement.
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(n) Due Diligence . The Lender shall have completed and been satisfied with the results of its due diligence review and audit of the Borrower, its financial condition, assets, operations and property.
(o) Documentation Fee . The Borrower shall have paid and reimbursed the Lender for any expenses it incurs in connection with the Lender’s due diligence review of the Borrower up to a maximum of Five Thousand and No/100 Dollars ($5,000.00).
(p) Payment of Legal Fees . The Borrower shall have paid and reimbursed the Lender for any expenses it incurs in the preparation of this Agreement and any agreement or instrument required by this Agreement up to a maximum of Twenty Thousand and No/100 Dollars ($20,000.00) in excess of those fees and costs described in 5.1(o) above. Expenses include, but are not limited to, the Lender’s attorneys’ fees and costs.
(q) Consumer Loan Documents . The Lender shall have received the original documents evidencing the obligations of the Consumer Loan Debtor to the Borrower for every Consumer Loan sold, transferred or held by the Borrower.
6. AFFIRMATIVE COVENANTS .
The Borrower covenants and agrees that from and after the date of this Agreement and so long as any Obligation remains unpaid or outstanding, the Borrower will, and will cause the Parent and each Subsidiary, if any, to do the following:
6.1 Financial Statements, Consumer Loan Documents and Reports .
The Borrower shall furnish to the Lender the following documents, instruments and financial information:
(a) Compliance Certificate . On a monthly basis beginning on the first day of each calendar month following the date hereof and continuing on the same day of each calendar month thereafter, as of the last day of the immediately preceding month, or at any other time requested by Lender in its sole discretion, a Compliance Certificate certified by both the Authorized Financial Officer of the Parent and the Authorized Manager of the Borrower.
(b) Consumer Loan Documents . Within seven (7) days from the purchase, transfer or assignment of a Consumer Loan to the Borrower, or at such other intervals as the Lender may hereafter determine, the original documents evidencing the obligations of the Consumer Loan Debtor to the Borrower; copies of all documents relating to the Consumer Loan; and such further information and/or schedules as the Lender may reasonably require, all in a form satisfactory to the Lender.
(c) Annual Statements . As soon as available but no later than ninety (90) days after the end of each Fiscal Year, annual, consolidated Financial Statements which shall be compiled by an independent certified public accountant acceptable to the Lender and presenting fairly, in all material respects, the financial position, and the results of operations and the cash flows of the Borrower and the Parent and any Affiliates thereof for such period. In addition to the annual Financial Statements, the Borrower shall, promptly upon receipt, furnish to the Lender a copy of any other report submitted to the Borrower or the Parent or any Affiliates thereof by independent accountants in connection with any annual, interim or special audit made by them of the financial records of the Borrower.
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(d) Tax Returns . Within fifteen (15) days after they are filed, copies of federal income tax returns of the Borrower and its Parent and any Affiliates thereof with all schedules. In the event any lawful extension is obtained with respect to the filing date of such federal income tax returns, the Borrower will deliver a copy of the extension request to the Lender with fifteen (15) days of filing.
(e) Other Information . From time to time, such further information regarding the business, affairs, and financial condition of the Borrower, the Parent and any Affiliates thereof as the Lender may reasonably request.
6.2 Material Changes and Other Information . The Borrower shall promptly notify the Lender of any litigation, administrative proceeding, investigation, business development, or change in financial condition which could reasonably have a Material Adverse Effect. In addition, promptly upon request by the Lender from time to time (which may be on a monthly or other basis), the Borrower shall provide such other information and reports regarding the operations, business affairs, prospects and financial condition of the Borrower as the Lender may reasonably request.
6.3 Maintenance of Corporate Existence; Assets . The Borrower shall notify the Lender at least thirty (30) days before any change of name of the Borrower and shall maintain:
(a) its corporate existence and its qualification to do business and good standing in each jurisdiction in which qualification is necessary for the proper conduct of its business;
(b) all licenses, permits and other authorizations necessary for the ownership and operation of its properties and business; and
(c) its assets and properties (including all of the Collateral) in good repair, working order and condition and shall make all necessary or appropriate repairs, renewals, replacements and substitutions, so that the value and efficiency of all such assets and properties shall at all times be properly preserved and maintained.
6.4 Conduct of Business; Permits and Approvals; Compliance with Laws . The Borrower and its Subsidiaries, if any, shall (a) continue to engage in an efficient and economical manner in a business of the same general type as conducted by it on the date of this Agreement; (b) maintain, in full force and effect, its franchises, and all licenses, patents, trademarks, trade names, contracts, permits, approvals and other rights necessary to the profitable conduct of its business; and (c) comply, in all respects with all applicable laws, rules, Regulations, and orders.
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6.5 Maintenance of Insurance .
(a) Maintenance of Insurance . The Borrower and each Subsidiary, if any, will maintain with financially sound and reputable insurers insurance with respect to its properties and business against such casualties and contingencies as shall be in accordance with general practices of businesses engaged in similar activities in similar geographic areas. Such insurance shall be in such minimum amounts that the Borrower will not be deemed a co-insurer under applicable insurance laws, regulations and policies and otherwise shall be in such amounts, contain such terms, be in such forms and be for such periods as may be reasonably satisfactory to the Lender. In addition, all such insurance shall be payable to the Lender as loss payee. Without limiting the foregoing, the Borrower will (i) keep all of its physical property insured with casualty or physical hazard insurance on an “all risks” basis, with broad form flood and earthquake coverages and electronic data processing coverage, with a full replacement cost endorsement and an “agreed amount” clause in an amount equal to 100% of the full replacement cost of such property, (ii) maintain all such workers’ compensation or similar insurance as may be required by law, and (iii) maintain, in amounts and with deductibles equal to those generally maintained by businesses engaged in similar activities in similar geographic areas, general public liability insurance against claims of bodily injury, death or property damage occurring, on, in or about the properties of the Borrower; business interruption insurance; and product liability insurance.
(b) Insurance Proceeds . The proceeds of any casualty insurance in respect of any casualty loss of any of the Collateral shall, subject to the rights, if any, of other parties with an interest having priority in the property covered thereby, (i) so long as no Event of Default has occurred and is continuing and to the extent that the amount of such proceeds is less than Fifty Thousand and No/100 Dollars ($50,000.00) be disbursed to the Borrower for direct application by the Borrower solely to the repair or replacement of the Borrower’s property so damaged or destroyed, and (ii) in all other circumstances, be held by the Lender as cash collateral for the Obligations. The Lender may, at its sole option, disburse from time to time all or any part of such proceeds so held as cash collateral, upon such terms and conditions as the Lender may reasonably prescribe, for direct application by the Borrower solely to the repair or replacement of the Borrower’s property so damaged or destroyed, or the Lender may apply all or any part of such proceeds to the Obligations.
(c) Continuation of Insurance . All policies of insurance shall provide for at least thirty (30) days prior written cancellation notice to the Lender. In the event of failure by the Borrower to provide and maintain insurance as provided in this Agreement, the Lender may, at its option, provide such insurance and charge the amount thereof to the Borrower. The Borrower shall furnish the Lender with certificates of insurance and policies evidencing compliance with the foregoing insurance provision.
6.6 Pa y ment of Debt; Payment of Taxes; Etc . The Borrower and each Subsidiary, if any, shall promptly pay and discharge:
(a) all of its Debt in accordance with its terms;
(b) all Taxes, assessments, and governmental charges or levies imposed upon it or upon its income and profits, upon any of its property, real, personal or mixed, or upon any part thereof, not less than ten (10) days before the date upon which any interest or penalties shall accrue; and
(c) all lawful claims for labor, materials and supplies or otherwise, which, if unpaid, might become a lien or charge upon the property or any part thereof.
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6.7 Notice of Events . Promptly upon discovery by the Borrower or any officer or manager of the Borrower of any of the events described in subsections (a) through (g) below, the Borrower shall deliver to the Lender within three (3) days of the discovery a written notice, which describes the event and all action the Borrower proposes to take with respect thereto:
(a) an Event of Default or Potential Default under this Agreement;
(b) any default or event of default under a contract or contracts and the default or event of default involves payments by one or more of the Borrower or the Parent in an aggregate amount equal to or in excess of Twenty-Five Thousand Dollars ($25,000.00);
(c) a default or event of default under or as defined in any evidence of or agreements for Indebtedness for Borrowed Money under which the Borrower’s or the Parent’s liability is equal to or in excess of Twenty-Five Thousand and No/100 Dollars ($25,000.00) singularly or in the aggregate, whether or not an event of default has been declared by any party to the agreement or any event which, upon the lapse of time or the giving of notice or both, would become an event of default under any agreement or instrument or would permit any party to the instrument or agreement to terminate or suspend any commitment to lend to the Borrower or the Parent or to declare or to cause any of the indebtedness to be accelerated or payable before it would otherwise be due;
(d) the institution of, any material adverse determination in, or the entry of any default judgment or order or stipulated judgment or order in, any suit, action, arbitration, administrative proceeding, criminal prosecution or governmental investigation against the Borrower or the Parent in which the amount in controversy is at least Twenty-Five Thousand and No/100 Dollars ($25,000.00) singularly or in the aggregate;
(e) any change in any Regulation, including, without limitation, changes in tax laws and regulations, which could reasonably have a material adverse impact on the ability of the Borrower to perform its obligations under the Loan Documents or a Material Adverse Effect;
(f) the receipt of any notice from any governmental authority that the Borrower is disqualified, barred or suspended from bidding on or performing any contract or proposed contract; or
(g) any change in the location of its place of business, of the places where records concerning its Accounts are kept, or any new location or discontinuance of any place of business.
6.8 Inspection Rights . The Borrower shall at any time during regular business hours and as often as reasonably requested in advance by the Lender, (a) but no sooner than twenty four (24) hours from such request, permit the Lender or any authorized officer, employee, agent, or representative of the Lender, to examine and make abstracts from the records and books of the Borrower and the Parent at the main office in Las Vegas, Nevada, (b) upon five (5) days notice, visit the other branch offices of the Parent and examine and make abstracts from the records and books of the Borrower and the Parent located at such locations, (c) and to discuss the affairs, finances, and accounts of the Borrower and the Parent with any of such parties’ officers, directors or independent accountants, which activities shall be at the expense of the Lender but reimbursed by the Borrower per Section 2.11(b).
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6.9 Further Assurances . The Borrower and each Subsidiary, if any, shall do such further acts and things and execute and deliver to the Lender such additional assignments, agreements, powers and instruments, as the Lender may reasonably require or reasonably deem advisable to carry into affect the purposes of this Agreement or to better assure and confirm unto the Lender rights, powers and remedies under this Agreement.
6.10 Maintenance of Books and Records . The Borrower shall keep complete and accurate books and records with respect to the business of the Borrower and the Collateral consistent with good business. The Borrower will permit officers or representatives of the Lender to examine and make excerpts from such books and records and to visit and inspect its properties, both real and personal, at all reasonable times.
6.11 Maintenance of Collateral . The Borrower shall take adequate care of the Collateral and maintain it in good working order and repair. The Borrower shall notify the Lender of any change occurring in or to any Collateral or in any fact or circumstance warranted or represented by the Borrower to the Lender.
6.12 Collateral Protection Expenses; Preservation of Collateral .
(a) Expenses Incurred by Lender . In the Lender’s discretion, if the Borrower fails to do so, the Lender may discharge Taxes and other encumbrances at any time levied or placed on any of the Collateral, maintain any of the Collateral, make repairs thereto and pay any necessary filing fees or insurance premiums. The Borrower agrees to reimburse the Lender on demand for all expenditures so made. The Lender shall have no obligation to the Borrower to make any such expenditures, nor shall the making thereof be construed as the waiver or cure of any Event of Default.
(b) Lender’s Obligations and Duties . Anything herein to the contrary notwithstanding, the Borrower shall remain obligated and liable under all of the Loan Documents. The Lender shall not have any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement or the receipt by the Lender of any payment relating to any of the Collateral, nor shall the Lender be obligated in any manner to perform any of the obligations of the Borrower under or pursuant to any such contract or agreement, to make inquiry as to the nature or sufficiency of any payment received by the Lender in respect of the Collateral or as to the sufficiency of any performance by any party under any such contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to the Lender or to which the Lender may be entitled at any time or times. The Lender’s sole duty with respect to the custody, safe keeping and physical preservation of the Collateral in its possession, under Section 9-207 of the Uniform Commercial Code of the State of Florida or otherwise, shall be to deal with such Collateral in the same manner as the Lender deals with similar property for its own account.
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6.13 Assignment of Claims Act . The Borrower shall notify the Lender immediately if any Accounts arise out of contracts with the United States or any department, agency, or instrumentality thereof. The Borrower shall execute any instruments and take any steps to perfect the assignment of the Borrower’s rights to the Lender as required under the Federal Assignment of Claims Act.
6.14 Collateral . The Borrower shall: (a) keep the Collateral at the chief executive office of the Borrower; (b) except for the security interest granted under this Agreement, be the owner of the Collateral free from any right or claim of any other person, Lien, security interest or other encumbrance, and the Borrower shall defend the same against all claims and demands of all persons at any time claiming the same or any interests therein adverse to the Lender, (c) keep the Collateral in good order and repair and will not use the same in violation of law or any policy of insurance thereon, (d) permit the Lender, or its designee, to inspect the Collateral at any reasonable time, wherever located, (e) pay promptly when due all taxes, assessments, governmental charges and levies upon the Collateral or incurred in connection with the use or operation of such Collateral or incurred in connection with this Agreement, and (f) continue to operate, its business in compliance with all applicable provisions of the federal Fair Labor Standards Act, as amended, and with all applicable provisions of federal, state and local statutes and ordinances dealing with the control, shipment, storage or disposal of hazardous materials or substances.
6.15 OFAC; PATRIOT Act Compliance . The Borrower will (a) refrain from doing business with any Blocked Person in violation of the economic sanctions of the United States administered by the Office of Foreign Assets Control, and (b) provide, the extent commercially reasonable, such information and take such actions as are reasonably requested by the Lender in order to assist the Lender in maintaining compliance with the PATRIOT Act.
6.16 Purchase of Consumer Loans . The Borrower will cause Consumer Loans originated or held by the Parent or any Affiliate of the Parent to be timely transferred to the Borrower as set forth in the Approved Purchase Agreement.
6.17 Accounts .
(a) Control Agreement . Notwithstanding any other provision hereof, within 180 days from the Closing Date, the Borrower shall deliver a fully executed account control agreement for the Loan Account, in form and substance satisfactory to the Lender in its sole discretion, in favor of the Lender with the applicable financial institution holding the Loan Account.
(b) Account Access . The Borrower shall provide or cause to be provided to the Lender at all times online viewing privileges to the Loan Account and the Collection Account.
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7. NEGATIVE COVENANTS .
The Borrower covenants and agrees that, without the prior written consent of the Lender, from and after the date of this Agreement and so long as any Obligations remain unpaid or outstanding, it will not, and will not permit any Subsidiary to do any of the following:
7.1 Legal Status, Merger, Consolidation . Neither the Borrower nor the Parent shall:
(a) change its name, place of business, chief executive office, mailing address or organizational identification number without providing at least thirty (30) days prior written notice to the Lender;
(b) change its type of organization, jurisdiction of organization or other legal structure; merge, consolidate, divide or liquidate or allow itself to be liquidated;
(c) sell, transfer, convey or lease all or any substantial part of its assets except for the sale or other disposition of assets in the ordinary course of its business, or
(d) purchase or otherwise acquire any shares of stock of, or similar interest in any other Person or all or substantially all of the assets or business of any other Person.
7.2 Indebtedness for Borrowed Money . Neither the Borrower nor the Parent shall incur, create, or permit to exist any Indebtedness for Borrowed Money except Indebtedness for Borrowed Money of the Borrower under this Agreement.
7.3 Liens . Neither the Borrower nor the Parent shall create, assume or permit to exist any Lien on any of its property or assets whether now owned or hereafter acquired, or upon any income or profits therefrom, except Permitted Liens.
7.4 Guaranties . Neither the Borrower nor the Parent shall guaranty or otherwise in any way become or be responsible for indebtedness or obligations (including working capital maintenance, take-or-pay contracts, etc.) of any other Person, contingently or otherwise, except: (a) the endorsement of negotiable instruments of deposit in the normal course of business; (b) any guaranty to secure any indebtedness or obligation which is permitted under this Agreement; and (c) those guaranties described on Schedule 7 . 4 .
7.5 Acquisitions and Investments . Neither the Borrower nor the Parent shall purchase or otherwise acquire (including without limitation by way of share exchange) any part or amount of the capital stock or assets of, or make an Investment in any other Person; enter into any new business activities or ventures not directly related to its present business; or create any Subsidiary.
7.6 Transfer of Assets; Nature of Business . Neither the Borrower nor the Parent shall (a) sell, transfer, pledge, assign or otherwise dispose of any assets or capital stock of the Borrower or the Parent; or (b) discontinue, liquidate or change in any material respect any substantial part of its operations or business.
7.7 Restricted Payments . Neither the Borrower nor the Parent shall make any redemptions, repurchases, dividends or distributions of any kind in respect of the Borrower’s equity interests; provided, however, the Borrower may make regular dividends and distributions so long as there is no Event of Default under this Agreement.
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7.8 Accounting Change . Neither the Borrower nor the Parent shall make or permit any change in financial accounting policies or financial reporting practices.
7.9 Goods . The Borrower shall not store any Collateral with a bailee or authorize, cause, or permit the issuance or execution of any negotiable warehouse receipt or bill of lading representing any right, title, or interest in and to any Collateral, unless same are forthwith turned over to the Lender so that the Lender shall continue to have a perfected security interest in such Collateral.
7.10 Fixtures and Accessions . The Borrower shall not allow any Collateral to become affixed to real estate, become an accession to other goods or become part of a product or mass, without first providing the Lender with all waivers and consent the Lender deems necessary to make its security interest valid against, and superior to, the rights of all parties holding interests in the real estate or other goods.
7.11 Intangibles . The Borrower shall not extend the time for payment of any Account or otherwise modify, amend, or impair any of the terms of any Collateral. The Borrower shall promptly notify the Lender of any disputes that shall arise in connection with any Collateral or if any obligation is not paid when due, or if any petition in bankruptcy or under any other insolvency act for the relief of debtors with respect to an Account Debtor is filed, or if an Account Debtor makes an assignment for the benefit of creditors, becomes insolvent, or ceases to carry on its business, or if the Borrower has notice of any facts or circumstances that could reasonably be expected to have a material adverse effect upon the ability of an Account Debtor to pay its obligations on any Collateral. The Borrower shall endorse and transfer possession of all Instruments, Documents and Chattel Paper now part of the Collateral to the Lender immediately, and as to those hereafter acquired, immediately following acquisition. The Borrower shall perfect a security interest (using a method satisfactory to the Lender) in all Goods covered by Chattel Paper.
7.12 Transactions with Affiliates or Subsidiaries .
(a) The Borrower shall not enter into any transaction with any Affiliate including, without limitation, the purchase, sale, or exchange of property, or the loaning, payment or giving of funds to any Affiliate except for the Approved Purchase Agreement and the Approved Servicing Agreement.
(b) Neither the Borrower nor the Parent shall create or acquire any Subsidiary without the prior written consent of the Lender.
7.13 Collateral . The Borrower shall not: (a) remove the Collateral from the chief executive office of the Borrower without providing at least thirty (30) days prior written notice to the Lender, except for the removal of Inventory in the ordinary course of business; (b) pledge, mortgage or create, or suffer to exist any right of any person in or claim by any person to the Collateral, or any security interest, lien or encumbrance in the Collateral in favor of any person, other than the Lender, except as permitted under the Loan Documents; (c) sell or otherwise dispose, or offer to sell or otherwise dispose, of the Collateral or any interest therein except for (i) sales and leases of Inventory and licenses of General Intangibles in the ordinary course of business, and (ii) so long as no Event of Default has occurred and is continuing, sales or other dispositions of obsolescent items of equipment consistent with past practices.
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7.14 Management Changes . The Borrower acknowledges that the Lender is relying upon the abilities of the Authorized Manager as a material inducement for the Lender to enter into this Agreement and agree to make the Loan. Accordingly, the Borrower shall, at all times, maintain a manager or managing member that is satisfactory to the Lender.
7.15 Contracts . The Borrower shall not enter into any agreements, contracts, purchase or sale orders, leases for personal or real property, commitments, arrangements or understandings, written or oral, other than the Profit Sharing Agreement, the Approved Purchase Agreement, and the Approved Servicing Agreement.
7.16 Amendment to Core Documents . The Borrower shall not make or permit to be made any amendment, modification or change to the Approved Operating Agreement, the Profit Sharing Agreement, the Approved Purchase Agreement, or the Approved Servicing Agreement
7.17 Consumer Loans Business . Neither the Borrower, nor the Parent or any Affiliate thereof shall (a) own, control, operate or manage any other business that makes consumer loans in the United States of America other than through the Parent, or (b) permit any Consumer Loans originated or held by the Parent or any Affiliate to be sold to any other Person except to the Borrower in compliance with the terms of the Approved Purchase Agreement.
7.18 Loan Account Changes . Neither the Borrower, nor the Parent shall not take any action to direct payments from Consumer Loan Debtors for Consumer Loans to any other account other than the Collection Account, direct funds held in the Collection Account to any other account other than the Loan Account, or remove the Lender as a signatory on the Loan Account.
7.19 Employees . The Borrower shall not hire or retain any employees, agents or consultants in the operation of its business or otherwise.
8. DEFAULT .
8.1 Events of Default . The Borrower shall be in default if any one or more of the following events (each, an “ Event of Default ”) occurs:
(a) Payments . The Borrower fails to pay any payment of principal or interest on the Note when due and payable (whether at maturity, by notice of intention to prepay, or otherwise).
(b) Other Charges . The Borrower fails to pay any other charges, fees, expense or obligations owing to the Lender arising out of or incurred in connection with this Agreement or any other Loan Document within ten (10) days after the date the Lender gives notice that the payment is due and payable.
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(c) Covenants . The Borrower, the Parent or any Affiliate thereof fails to observe or perform as and when required any of the terms, conditions or covenants contained in any Loan Document (other than with respect to the covenants contained in Sections 6 and 7 of this Agreement for which no cure period shall exist), and such failure continues for thirty (30) Business Days after the date the Lender gives notice of such failure to the Borrower.
(d) Representations, Warranties . Any representation or warranty made or deemed to be made by the Borrower, the Parent or any Affiliate thereof in this Agreement or in any other Loan Document or in any exhibit, schedule, report or certificate delivered pursuant to this Agreement or the other Loan Documents shall prove to have been false, misleading or incorrect in any material respect.
(e) Bankruptcy . The Borrower, the Parent, any Affiliate thereof or any Guarantor of the Obligations is dissolved or liquidated, makes an assignment for the benefit of creditors, files a petition in bankruptcy, is adjudicated insolvent or bankrupt, petitions or applies to any tribunal for any receiver or trustee, commences any proceeding relating to itself under any bankruptcy, reorganization, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, has commenced against it any such proceeding which remains undismissed for a period of thirty (30) days, or indicates its consent to, approval of or acquiescence in any such proceeding, or any receiver of or trustee for the Borrower, the Parent or any Subsidiary or any substantial part of the property of the Borrower, the Parent or any Subsidiary is appointed, or if any such receivership or trusteeship to continues undischarged for a period of thirty (30) days.
(f) Other Obligations between Borrower and Lender . The Borrower breaches or is in default under any other agreement between the Borrower and the Lender.
(g) Attachments . Any of the Collateral is subjected to attachment, execution, levy, seizure or confiscation in any legal proceeding or otherwise, or if any legal or administrative proceeding is commenced against the Borrower or any of the Collateral, which in the good faith judgment of the Lender subjects any of the Collateral to a material risk of attachment, execution, levy, seizure or confiscation and no bond is posted or protective order obtained to negate such risk.
(h) Change in Control . Any Change in Control shall occur with respect to the Borrower, the Parent or any Affiliate thereof. A Change in Control shall be deemed to have occurred if (a) any Person becomes the “beneficial owner” (as defined in Rule 13d-5 under the Exchange Act, except that a Person shall be deemed to have “beneficial ownership” of all capital stock of the such entity that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than fifty percent (50%) of the total voting power of the issued and outstanding capital stock of such entity normally entitled to vote in the election of the board of directors of such entity, or (b) during any consecutive two (2) year period, individuals who at the beginning of such period constituted a majority of the members of the board of directors of such entity or whose nomination for election by the stockholders of such entity was approved by a majority of the members of the board of directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the board of directors then in office.
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(i) Revocation of Guaranty . Any Guarantor revokes or attempts to revoke his or her guaranty of any of the Obligations or fails to observe or perform any covenant, condition or agreement to be performed under any guaranty or other related document to which he or she is a party.
(j) Termination of Business . The Borrower or its Parent ceases any material portion of its business operations as presently conducted.
(k) Termination or Amendment of Security Interest . Debtor’s improper filing of an amendment or termination statement relating to a filed financing statement describing the Collateral.
(l) Sale of Business . The Borrower, the Parent or any Affiliate thereof sells, assigns or transfers substantially all of such entity’s assets without the prior written consent of the Lender.
(m) Lien Priority . The Lender fails to have a valid and enforceable perfected security interest in or lien on the Consumer Loans or other Collateral securing the Borrower’s obligations under this Agreement, or such security interest or lien fails to be prior to the rights and interest of all other Liens except for any Liens in favor of the Lender and Permitted Liens.
(n) Lawsuits . Any lawsuit or lawsuits are filed against the Borrower or the Parent seeking an aggregate amount of One Hundred Thousand and No/100 Dollars ($100,000.00) or greater.
(o) Injunction . The Borrower or the Parent is enjoined, restrained, or in any way prevented by order of any court or any administrative or regulatory agency from conducting all or any material part of its business affairs and such order is not lifted or stayed within ten (10) Business Days.
(p) Government Action . Any government authority takes action that the Lender believes materially adversely affects the Borrower’s or any Guarantor’s financial condition or ability to repay.
(q) Other Funding . The Borrower, the Parent or any Affiliate thereof incurs, creates, or permits to exist any Indebtedness for Borrowed Money other than Indebtedness for Borrowed Money of the Borrower under this Agreement.
(r) Other Business . The Borrower, the Parent or any Affiliate thereof owns, controls, operates or manages a consumer loan business in the United States of America other than the Parent’s consumer loan business.
(s) Loan Sales . Any Consumer Loan originated or held by the Parent or any Affiliate thereof is not sold to the Borrower in compliance with the terms of the Approved Purchase Agreement.
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(t) Deposits . Payments on account of Consumer Loans are deposited into any other account other than the Collection Account, or all amounts held in the Collection Account are not deposited into the Loan Account on a daily basis.
(u) Breach or Termination of Agreements . Any breach or termination of the Approved Purchase Agreement or the Approved Servicing Agreements by either the Borrower or the Parent occurs without the express written consent of the Lender.
(v) Cross Default . A material breach by the Borrower, the Parent or any Affiliate thereof shall occur under (i) any loan arising from a Refinance Event or (ii) other agreement, document or instrument, whether heretofore, now or hereafter existing between such entity and any Person other than the Lender involving amounts at issue exceeding Ten Thousand and No/100 ($10,000.00) and such breach continues for more than five (5) Business Days.
8.2 Rights and Remedies . In addition to all other rights, options, and remedies granted or available to the Lender under any of the Loan Documents or otherwise available at law or in equity, upon an occurrence and continuance of an Event of Default (other than an Event of Default under Section 8.1(e)), the Lender may, at its option, terminate this Agreement and declare the Loan and all other Obligations, including without limitation accrued interest, to be due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Upon the occurrence of any event specified in Section 8.1(e) above, this Agreement shall automatically terminate and the Loan and all other Obligations, including without limitation accrued interest, shall immediately be due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. So long as an Event of Default shall have occurred and be continuing and at all times thereafter, the Loan shall bear interest at the Default Rate. If an Event of Default shall have occurred and be continuing, the Lender, without any other notice to or demand upon the Borrower, shall have in any jurisdiction in which enforcement hereof is sought, in addition to all other rights and remedies, the rights and remedies of a secured party under the Uniform Commercial Code of Florida and any additional rights and remedies which may be provided to a secured party in any jurisdiction in which Collateral is located, including, without limitation, the right to take possession of the Collateral, and for that purpose the Lender may, so far as the Borrower can give authority therefor, enter upon any premises on which the Collateral may be situated and remove the same therefrom. The Lender may in its discretion require the Borrower to assemble all or any part of the Collateral at such location or locations within the jurisdiction(s) of the Borrower’s principal office(s) or at such other locations as the Lender may reasonably designate. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Lender shall give to the Borrower at least ten (10) calendar days prior written notice of the time and place of any public sale of Collateral or of the time after which any private sale or any other intended disposition is to be made. The Borrower hereby acknowledges that ten (10) calendar days prior written notice of such sale or sales shall be reasonable notice. In addition, the Borrower waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of the Lender’s rights and remedies hereunder, including, without limitation, its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights and remedies with respect thereto.
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8.3 Default Rate . To the extent permitted by law, whenever there is an Event of Default or non-payment upon demand, the rate of interest on the unpaid principal balance of the Loan shall, at the option of the Lender, be the lesser of (i) three percent (3%) per annum above the interest rate payable under this Agreement or (ii) the maximum amount permitted by applicable law to be contracted for, charged or received (the “ Default Rate ”). The Borrower acknowledges that: (a) the Default Rate is a material inducement to the Lender to enter this Agreement; (b) the Lender would not have entered into this Agreement in the absence of the agreement of the Borrower to pay the Default Rate; (c) the Default Rate represents compensation for increased risk to the Lender that the Obligations will not be repaid; and (d) the Default Rate is not a penalty and represents a reasonable estimate of (i) the cost to the Lender in allocating its resources (both personnel and financial) to the on-going review, monitoring, administration and collection of the Loan Documents, and (ii) compensation to the Lender for losses that are difficult to ascertain.
8.4 Securities and Deposits . The Lender may at any time following and during the continuance of an Event of Default, at its option, transfer to itself or any nominee any securities constituting Collateral, receive any income thereon and hold such income as additional Collateral or apply it to the Obligations. Whether or not any Obligations are due, the Lender may, following and during the continuance of an Event of Default, demand, sue for, collect, or make any settlement or compromise, which it deems desirable with respect to the Collateral. Regardless of the adequacy of Collateral or any other security for the Obligations, any deposits or other sums at any time credited by or due from the Lender to the Borrower may at any time be applied to or set off against any of the Obligations then due and owing.
8.5 Notification to Account Debtors and Other Persons Obligated on Collateral . If an Event of Default shall have occurred and be continuing, the Borrower shall, at the request and option of the Lender, notify account debtors and other persons obligated on any of the Collateral of the security interest of the Lender in any account, chattel paper, general intangible, instrument or other Collateral and that payment thereof is to be made directly to the Lender or to any financial institution designated by the Lender as the Lender’s agent therefor, and the Lender may itself, if an Event of Default shall have occurred and be continuing, without notice to or demand upon the Borrower, so notify account debtors and other persons obligated on Collateral. After the making of such a request or the giving of any such notification, the Borrower shall hold any proceeds of collection of accounts, chattel paper, general intangibles, instruments and other Collateral received by the Borrower as trustee for the Lender without commingling the same with other funds of the Borrower and shall turn the same over to the Lender in the identical form received, together with any necessary endorsements or assignments. The Lender shall apply the proceeds of collection of accounts, chattel paper, general intangibles, instruments and other Collateral received by the Lender to the Obligations.
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8.6 Standards for Exercising Rights and Remedies . To the extent that applicable law imposes duties on the Lender to exercise remedies in a commercially reasonable manner, the Borrower acknowledges and agrees that it is not commercially unreasonable for the Lender (a) to fail to incur expenses reasonably deemed significant by the Lender to prepare any Collateral for disposition or otherwise to fail to complete raw material or work in process into finished goods or other finished products for disposition, (b) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of the Collateral to be collected or disposed of, (c) to fail to exercise collection remedies against Account Debtors or other persons obligated on the Collateral or to fail to remove liens or encumbrances on or any adverse claims against the Collateral, (d) to exercise collection remedies against Account Debtors and other persons obligated on the Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of the Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other persons, whether or not in the same business as the Borrower, for expressions of interest in acquiring all or any portion of the Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of the Collateral, whether or not the collateral is of a specialized nature, (h) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (i) to dispose of the assets in wholesale rather than retail markets, (j) to disclaim disposition warranties, (k) to purchase insurance or credit enhancements to insure the Lender against risks of loss, collection or disposition of Collateral or to provide to the Lender a guaranteed return from the collection or disposition of the Collateral, or (1) to the extent deemed appropriate by the Lender, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Lender in the collection or disposition of any of the Collateral. The Borrower acknowledges that the purpose of this Section 8.6 is to provide non-exhaustive indications of what actions or omissions by the Lender would fulfill the Lender’s duties under the UCC or other law of Florida or any other relevant jurisdiction in the Lender’s exercise of remedies against the Collateral and that other actions or omissions by the Lender shall not be deemed to fail to fulfill such duties solely on account of not being indicated in this Section 8.6. Without limitation upon the foregoing, nothing contained in this Section 8.6 shall be construed to grant any rights to the Borrower or to impose any duties on the Lender that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section 8.6.
8.7 Marshalling . The Lender shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of its rights and remedies hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, the Borrower hereby agrees that it will not invoke any law relating to the marshalling of collateral which might cause delay in or impede the enforcement of the Lender’s rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, the Debtor hereby irrevocably waives the benefits of all such laws.
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8.8 Proceeds of Dispositions; Expenses . The Borrower shall pay to the Lender on demand any and all expenses, including reasonable attorneys’ fees and disbursements, incurred or paid by the Lender in protecting, preserving or enforcing the Lender’s rights and remedies under or in respect of any of the Obligations or any of the Collateral following an Event of Default. After deducting all of said expenses, the residue of any proceeds of collection or sale or other disposition of the Collateral shall, to the extent actually received in cash, be applied to the payment of the Obligations in such order or preference as the Lender may determine, proper allowance and provision being made for any Obligations not then due. Upon the final payment and satisfaction in full of all of the Obligations and after making any payments required by Sections 9-608(a)(1)(C) or 9-615(a)(3) of the Uniform Commercial Code of Florida, any excess shall be returned to the Borrower. In the absence of final payment and satisfaction in full of all of the Obligations, the Borrower shall remain liable for any deficiency.
8.9 No Conflicts with Enforcement . The parties acknowledge that the Profit Sharing Agreement shall not in any way affect Lender’s rights under this Agreement and as a creditor with respect to the Obligations. Borrower acknowledges that Borrower received proceeds of this Loan in an arm’s length transaction approved by Borrower and Borrower’s Parent, with the advice of independent separate counsel. Borrower acknowledges that Borrower will not be entitled to concessions, extensions or otherwise because of the Lender’s or its Affiliates’ relationship to Borrower.
9. MISCELLANEOUS .
9.1 Waiver . No failure or delay on the part of the Lender in exercising any right, power or remedy under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy under any Loan Document. The remedies provided under the Loan Documents are cumulative and not exclusive of any remedies provided by law.
9.2 Amendments . No amendment, modification, termination or waiver of any Loan Document or any provision thereof nor any consent shall be effective unless the same shall be in writing and be signed by the Lender and the Borrower and then any such waiver or consent shall be effective only in the instance and for the specific purpose for which given. No notice to or demand on the Borrower shall entitle the Borrower to any other or further notice or demand in similar or other circumstances. Notwithstanding any other provision contained in any Loan Document, no amendment, modification, termination or waiver shall affect the payment of principal (including without limitation the date when due), or reduce any interest rate or any fee provided in this Agreement, or extend the Maturity Date.
9.3 Governing Law . The Loan Documents and all rights and obligations of the parties thereunder shall be governed by and be construed and enforced in accordance with the laws of the State of Florida without regard to principles of conflict of laws.
9.4 Participations and Assignments . The Borrower hereby acknowledges and agrees that the Lender may at any time: (a) grant participations in all or any portion of its right, title and interest in or to this Agreement or any other Loan Document (collectively, “ Participations ”) to any other lending office or to any other bank, lending institution or other entity which has the requisite sophistication to evaluate the merits and risks of investments in Participations (“ Participants ”); and (b) the Lender may assign its rights and obligations under this Agreement or any of the other Loan Documents. The Borrower may not assign its rights and obligations under this Agreement or any of the other Loan Documents without the prior written consent of the Lender. The Borrower agrees to comply with any direction given by the Lender to pay any portion of amounts due under this Agreement and the Loan Documents to any third party assignee or Participants in the Loan.
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9.5 Captions . Captions in this Agreement and the other Loan Documents are included for convenience of reference only and shall not constitute a part of this Agreement or of any Loan Document for any other purpose.
9.6 Notices . All notices, requests, demands, directions, declarations and other communications required or permitted between the Lender and the Borrower provided for in any Loan Document shall be in writing and shall, except as otherwise expressly provided, be deemed to have been duly given, made and received when personally delivered, or one day following the day when deposited with an overnight courier such as Federal Express, for delivery to the intended addressee or three (3) days following the day when deposited in the United States mails, by registered or certified mail, addressed as set forth below.
If to the Borrower:
IEC SPV, LLC
6160 West Tropicana Avenue
Suite E-13
Las Vegas, Nevada 89103
Attn: Paul Mathieson
If to the Lender:
BFG Loan Holdings, LLC
4912 Creekside Drive
Clearwater, FL 33760
Attn: Jonathan Golden, Esq.
Any party may alter the address to which communications or copies are to be sent by giving notice of such change of address to the other party in conformity with the provisions of this Section 9.6.
9.7 General . The liability of the Borrower under this Agreement shall continue to be effective or be automatically reinstated, as the case may be, if at any time payment, in whole or part, of any of the sums due to the Lender is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any other Person, or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to the Borrower or any other Person or any substantial part of Borrower’s property, or otherwise, all as though such payment had not been made.
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9.8 Net Payments .
(a) All payments made to the Lender by the Borrower under this Agreement, or under any other Loan Document will be made without set off, counterclaim or other defense. All payments by the Borrower will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature (including interest, penalties or similar liabilities) now or hereafter imposed by any jurisdiction or any political subdivision or taxing authority (but excluding any tax imposed on or measured by the gross or net income of the Lender) pursuant to the laws of the United States of America or any political subdivision, or taxing authority of the United States of America or any political subdivision, in which the principal office or applicable lending office of the Lender is located (collectively, together with any amounts payable pursuant to the next sentence, “ Taxes ”). If any Taxes are so levied or imposed, the Borrower agrees to pay the full amount of the Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement, under the Note or under any other Loan Document, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for in this Agreement or in the Note. The Borrower will furnish to the Lender upon request certified copies of tax receipts evidencing such payment by the Borrower. The Borrower will indemnify and hold harmless the Lender, and reimburse the Lender upon its written request, for the amount of any Taxes so levied or imposed and paid or withheld by the Lender.
(b) Notwithstanding the preceding subparagraph (a), the Borrower shall be entitled, to the extent required to do so by law, to deduct or withhold Taxes imposed by the United States of America (or any political subdivision or taxing authority thereof) from interest, fees or other amounts payable under this Agreement for the account of any Person other than the Lender (i) that is a domestic corporation (as such term is defined in Section 7701 of the Code) for federal income tax purposes (but excluding any foreign office of the Lender) or (ii) that has necessary forms on file with the Borrower for the applicable year to the extent deduction or withholding of such Taxes is not required as a result of the filing of such forms, provided that if the Borrower shall so deduct or withhold any Taxes, it shall provide a statement to the Lender, setting forth the amount of the Taxes so deducted or withheld, the applicable rate and any other information or documentation which the Lender may reasonably request for assisting the Lender to obtain any allowable credits or deductions for the taxes so deducted or withheld in the jurisdiction or jurisdictions in which the Lender is subject to tax.
9.9 Set-Offs and Application of Payments .
(a) The Borrower agrees, to the fullest extent each may effectively do so under applicable law, that any Participant may exercise rights of setoff or counterclaim and other rights as fully as if the Participant were a direct creditor of the Borrower.
(b) If an Event of Default shall have occurred and be continuing, the Lender and the Borrower agree that all payments on account of the Obligations shall be applied by the Lender as follows:
(1) First, to the Lender for any fees, costs or expenses incurred by the Lender under any of the Loan Documents or this Agreement, then due and payable and not reimbursed by the Borrower until such fees, costs and expenses are paid in full;
(2) Second, to the Lender for all interest then due and payable from the Borrower until such interest is paid in full;
(3) Third, to the Lender for the principal amount then due and payable from the Borrower until such principal is paid in full.
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9.10 Expenses of the Lender; Indemnification of the Lender .
(a) The Borrower will from time to time reimburse the Lender promptly following demand for all out-of-pocket expenses (including the reasonable fees and expenses of legal counsel) in connection with (i) the preparation of the Loan Documents and any amendments or modifications, or (ii) the enforcement of the Loan Documents following an Event of Default, including post-bankruptcy fees.
(b) In addition to the payment of the foregoing expenses, the Borrower agrees to indemnify, protect and hold the Lender and any holder of any Loan Document and the officers, directors, employees, agents, affiliates and attorneys of the Lender (collectively, the “ Indemnitees ”) harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature, including reasonable fees and expenses of legal counsel, which may be imposed on, incurred by, or asserted against the Indemnitee by the Borrower or other third parties and arise out of or relate to this Agreement or any of the other Loan Documents or any other matter whatsoever related to the transactions contemplated by or referred to in this Agreement or any of the other Loan Documents; provided, however, that the Borrower shall have no obligation to an Indemnitee to the extent that the liability incurred by the Indemnitee has been determined by a court of competent jurisdiction to be the result of gross negligence or willful misconduct of the Indemnitee. The provisions of this Section 9.10(b) shall survive the termination of this Agreement.
9.11 Suretyship/Waivers by Borrower . The Borrower waives demand, notice, protest, and notice of acceptance of this Agreement, notice of loans made, credit extended, Collateral received or delivered or other action taken in reliance hereon and all other demands and notices of any description. With respect to both the Obligations and the Collateral, the Borrower assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of or failure to perfect any security interest in any Collateral, to the addition or release of any Person primarily or secondarily liable, to the acceptance of partial payment thereon and the settlement, compromising or adjusting of any thereof, all in such manner and at such time or times as the Lender may deem advisable. The Lender shall have no duty as to the collection or protection of the Collateral or any income therefrom, the preservation of rights against prior parties, or the preservation of any rights pertaining thereto. The Borrower further waives any and all other suretyship defenses.
9.12 Survival of Warranties and Certain Agreements . All agreements, indemnifications, representations and warranties made or deemed made by the Borrower in this Agreement shall be of a continuing nature and shall survive the termination of this Agreement and the full payment and performance of the Obligations. This Agreement shall remain in full force and effect until the latest to occur of the Maturity Date, or the payment in full and performance of the Obligations.
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9.13 Severability . The invalidity, illegality or unenforceability in any jurisdiction of any provision in or obligation under this Agreement or any other Loan Document shall not affect or impair the validity, legality or enforceability of the remaining provisions or obligations under this Agreement or any other Loan Document or of such provision or obligation in any other jurisdiction.
9.14 No Fiduciary Relationship . No provision in this Agreement or in any other Loan Document and no course of dealing between the parties shall be deemed to create any fiduciary duty by the Lender to the Borrower. THE PROVISIONS OF THIS AGREEMENT AND THE LOAN DOCUMENTS INCLUDING WITHOUT LIMITATION CERTAIN PROVISIONS OF SECTION 3 OF THIS AGREEMENT CONTAIN THE GRANT OF POWERS OF ATTORNEY BY THE BORROWER COUPLED WITH AN INTEREST FOR THE SOLE BENEFIT OF THE LENDER. THIS AGREEMENT IS BEING EXECUTED IN CONNECTION WITH A LOAN OR OTHER FINANCIAL TRANSACTION FOR BUSINESS PURPOSES AND NOT PRIMARILY FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES. THE LENDER, AS AGENT FOR THE BORROWER UNDER THE POWERS OF ATTORNEY, IS NOT A FIDUCIARY FOR THE BORROWER. THE LENDER, IN EXERCISING ANY OF ITS RIGHTS OR POWERS PURSUANT TO THE POWERS OF ATTORNEY, MAY DO SO FOR THE SOLE BENEFIT OF THE LENDER AND NOT FOR THE BORROWER. THE BORROWER HAS NEVERTHELESS READ, UNDERSTANDS AND KNOWINGLY AND VOLUNTARILY ACCEPTS AND AGREES TO SUCH PROVISIONS CONTAINING POWERS OF ATTORNEY RECOGNIZING THAT CERTAIN IMPORTANT RIGHTS MAY BE RELINQUISHED IF ANY SUCH POWERS ARE EXERCISED.
9.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS . EACH OF THE BORROWER AND THE LENDER HEREBY CONSENTS TO THE JURISDICTION OF THE Thirteenth Judicial Circuit in and for Hillsborough County, Florida, or the United States District Court for the Middle District of Florida, Tampa Division, AND IRREVOCABLY AGREES THAT ANY ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THE NOTE, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL ONLY BE LITIGATED IN SUCH COURTS. EACH PARTY TO THIS AGREEMENT ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
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9.16 WAIVER OF JURY TRIAL . EACH OF THE BORROWER AND THE LENDER HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE LENDER/BORROWER RELATIONSHIP ESTABLISHED HEREBY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF THE BORROWER AND THE LENDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO THE TRANSACTION, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF THE BORROWER AND THE LENDER FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
9.17 Counterparts; Effectiveness . This Agreement and any amendments or waivers may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures were upon the same instrument. This Agreement and any amendments shall become effective when the Lender shall have received signed counterparts or notice by telecopy of the signature page that the counterpart has been signed and is being delivered to the Lender or facsimile that the counterparts have been signed by all the parties.
9.18 Use of Defined Terms . All words used herein in the singular or plural shall be deemed to have been used in the plural or singular where the context or construction so requires. Any defined term used in the singular preceded by “any” shall be taken to indicate any number of the members of the relevant class.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF , and intending to be legally bound hereby, the Borrower and the Lender have caused this Loan and Security Agreement to be executed as of the day and year first above written.
BORROWER: | ||
IEC SPV, LLC | ||
By: | /s/ Paul J. Mathieson | |
Name: | Paul J. Mathieson | |
Its: | Managing Member | |
LENDER: | ||
BFG Loan Holdings, LLC | ||
By: | /s/ John Fernando | |
Name: | John Fernando | |
Its: | President |
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PROMISSORY NOTE
$3,000,000.00 | Tampa, Florida | |
June 11,2012 |
A. GENERAL; TERMS OF PAYMENT
FOR VALUE RECEIVED, the undersigned, IEC SPV, LLC, a Delaware limited liability company (the “Borrower”), promises to pay to the order of BFG LOAN HOLDINGS, LLC, a Florida limited liability company (the “Lender”), at its office at 4912 Creekside Drive, Clearwater, Florida 33760, or at such other place as may be designated by the holder hereof in writing, the principal sum of Three Million and No/100 Dollars ($3,000,000.00), or so much thereof as may be advanced under this promissory note (the “Note”) and remain outstanding from time to time, together with interest thereon. This Note is issued pursuant to that certain Loan and Security Agreement, dated the date hereof, between the Borrower and the Lender (the “Loan Agreement”). All capitalized terms used herein but not otherwise defined shall have the meaning specified in the Loan Agreement.
Borrower will pay interest on the unpaid principal amount of the Loan from time to time outstanding, computed on the basis of a 360-day year, at the rates provided in the Loan Agreement but in no event in excess of the maximum rate permitted by law. Interest on the unpaid principal amount of the Loan shall be payable in accordance with the Loan Agreement. Upon the occurrence and during the continuance of an Event of Default, the Borrower shall on demand pay interest, to the extent permitted by law, on the unpaid Obligations at the maximum rate permitted by applicable law.
All payments by the Borrower on account of principal, interest or fees hereunder shall be made in lawful money of the United States of America, in immediately available funds. The Borrower authorizes (but shall not require) the Lender to debit the Loan Account or any other account maintained by the Borrower, at any date on which a payment is due under this Note, in an amount equal to any unpaid portion of such payment.
B. DEFAULT
Upon the occurrence of an Event of Default and during the continuance thereof, the Lender may declare the entire unpaid principal amount of this Note and all interest and fees accrued and unpaid hereon to be forthwith due and payable, whereupon the same shall immediately become and be forthwith due and payable, without present, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower.
C. MISCELLANEOUS
1. No Waiver: Rights and Remedies Cumulative . No failure on the part of the Lender to exercise, and no delay in exercising any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Lender of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies herein provided are cumulative and not exclusive of any remedies or rights provided by law or by any other agreement between the Borrower and the Lender.
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2. Costs and Expenses . The Borrower shall reimburse the Lender for all costs and expenses incurred by it and shall pay the reasonable fees and disbursements of legal counsel to the Lender in connection with the enforcement of the Lender’s rights hereunder.
3. Security . This Note is secured by the Collateral (as defined in the Loan Agreement).
4. Amendments . No amendment, modification or waiver of any provision of this Note nor consent to any departure by the Borrower there from shall be effective unless the same shall be in writing and signed by the Lender and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
5. Governing Law; Construction . THIS AGREEMENT, AND THE OTHER LOAN DOCUMENTS, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF FLORIDA, WITHOUT REGARD TO ITS PRINCIPLES REGARDING CONFLICT OF LAWS. IN THE EVENT OF LITIGATION BETWEEN THE LENDER AND THE BORROWER OVER ANY MATTER CONNECTED WITH THIS NOTE, THE RIGHT TO A TRIAL BY JURY IS HEREBY WAIVED BY THE LENDER AND THE BORROWER.
6. Successors and Assigns . This Note shall be binding upon the Borrower and its successors and assigns and the terms hereof shall inure to the benefit of the Lender and its successors and assigns, including subsequent holders hereof.
7. Severability . The provisions of this Note are severable, and if any provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall not in any manner affect such provision in any other jurisdiction or any other provision of this Note in any jurisdiction.
8. Waiver of Notice; Set-off . The Borrower hereby waives presentment, demand for payment, notice of protest and all other demands in connection with the delivery, acceptance, performance, default or enforcement of this Note. The balance of every account of the Borrower with, and each claim of the Borrower against, the Lender existing from time to time shall be subject to a lien and subject to be set-off against any and all liabilities of the Borrower to the Lender, including those hereunder.
9. Loan Agreement . This Note is the Promissory Note referred to in the Loan Agreement and the holder here of is entitled to the benefits thereof and of the other Loan Documents.
IEC SPV, LLC | ||
By: | /s/ Paul J. Mathieson | |
Name: | Paul J. Mathieson | |
Title: | Managing Member |
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AMENDED AND RESTATED PROMISSORY NOTE
$10,000,000.00 | Tampa, Florida | |
November 12, 2013 |
A. GENERAL; TERMS OF PAYMENT
FOR VALUE RECEIVED, the undersigned, IEC SPV, LLC, a Delaware limited liability company (the “Borrower”), promises to pay to the order of BFG LOAN HOLDINGS, LLC, a Florida limited liability company (the “Lender”), at its office at 4912 Creekside Drive, Clearwater, Florida 33760, or at such other place as may be designated by the holder hereof in writing, the principal sum of Ten Million and No/100 Dollars ($10,000,000.00), or so much thereof as may be advanced under this promissory note (the “Note”) and remain outstanding from time to time, together with interest thereon. This Note is issued pursuant to that certain Loan and Security Agreement, dated the date hereof, between the Borrower and the Lender (the “Loan Agreement”). All capitalized terms used herein but not otherwise defined shall have the meaning specified in the Loan Agreement.
Borrower will pay interest on the unpaid principal amount of the Loan from time to time outstanding, computed on the basis of a 360-day year, at the rates provided in the Loan Agreement but in no event in excess of the maximum rate permitted by law. Interest on the unpaid principal amount of the Loan shall be payable in accordance with the Loan Agreement. Upon the occurrence and during the continuance of an Event of Default, the Borrower shall on demand pay interest, to the extent permitted by law, on the unpaid Obligations at the maximum rate permitted by applicable law.
All payments by the Borrower on account of principal, interest or fees hereunder shall be made in lawful money of the United States of America, in immediately available funds. The Borrower authorizes (but shall not require) the Lender to debit the Loan Account or any other account maintained by the Borrower, at any date on which a payment is due under this Note, in an amount equal to any unpaid portion of such payment.
B. DEFAULT
Upon the occurrence of an Event of Default and during the continuance thereof, the Lender may declare the entire unpaid principal amount of this Note and all interest and fees accrued and unpaid hereon to be forthwith due and payable, whereupon the same shall immediately become and be forthwith due and payable, without present, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower.
C. MISCELLANEOUS
1. No Waiver: Rights and Remedies Cumulative . No failure on the part of the Lender to exercise, and no delay in exercising any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Lender of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies herein provided are cumulative and not exclusive of any remedies or rights provided by law or by any other agreement between the Borrower and the Lender.
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2. Costs and Expenses . The Borrower shall reimburse the Lender for all costs and expenses incurred by it and shall pay the reasonable fees and disbursements of legal counsel to the Lender in connection with the enforcement of the Lender’s rights hereunder.
3. Security . This Note is secured by the Collateral (as defined in the Loan Agreement).
4. Amendments . No amendment, modification or waiver of any provision of this Note nor consent to any departure by the Borrower therefrom shall be effective unless the same shall be in writing and signed by the Lender and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
5. Governing Law; Construction . THIS AGREEMENT, AND THE OTHER LOAN DOCUMENTS, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF FLORIDA, WITHOUT REGARD TO ITS PRINCIPLES REGARDING CONFLICT OF LAWS. IN THE EVENT OF LITIGATION BETWEEN THE LENDER AND THE BORROWER OVER ANY MATTER CONNECTED WITH THIS NOTE, THE RIGHT TO A TRIAL BY JURY IS HEREBY WAIVED BY THE LENDER AND THE BORROWER.
6. Successors and Assigns . This Note shall be binding upon the Borrower and its successors and assigns and the terms hereof shall inure to the benefit of the Lender and its successors and assigns, including subsequent holders hereof.
7. Severability . The provisions of this Note are severable, and if any provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall not in any manner affect such provision in any other jurisdiction or any other provision of this Note in any jurisdiction.
8. Waiver of Notice; Set-off . The Borrower hereby waives presentment, demand for payment, notice of protest and all other demands in connection with the delivery, acceptance, performance, default or enforcement of this Note. The balance of every account of the Borrower with, and each claim of the Borrower against, the Lender existing from time to time shall be subject to a lien and subject to be set-off against any and all liabilities of the Borrower to the Lender, including those hereunder.
9. Loan Agreement . This Note is the Promissory Note referred to in the Loan Agreement and the holder hereof is entitled to the benefits thereof and of the other Loan Documents.
IEC SPV, LLC | ||
By: | /s/ Paul J. Mathieson | |
Name: | Paul J. Mathieson | |
Title: | Managing Member |
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FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
This First Amendment to Loan and Security Agreement (the “ Amendment ”) dated as of November 12, 2013 is made by and between BFG LOAN HOLDINGS, LLC, a Florida limited liability company (“ Lender ”), IEC SPV, LLC, a Delaware limited liability company (“ Borrower ”), INVESTMENT EVOLUTION GLOBAL CORPORATION, a Delaware corporation (“ IEGC ”), INVESTMENT EVOLUTION CORPORATION, a Delaware corporation (“ IEC ”), and PAUL J. MATHIESON, an individual (“ Mathieson ”, and with IEGC and IEC, each a “ Guarantor ” and collectively the “ Guarantors ”, and together with Borrower and Guarantors, each a “ Loan Party ” and collectively the “ Loan Parties ”).
RECITALS
A. Borrower and Lender entered into that certain Loan and Security Agreement dated June 11, 2012 (as may be amended, supplemented or restated from time to time, the “ Loan Agreement ”) with respect to a line of credit from Lender to Borrower up to the original principal amount of $3,000,000.00 (the “ Loan ”). All capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.
B. Pursuant to the Loan Agreement, (i) Borrower executed and delivered to Lender that certain Promissory Note dated June 11, 2012 in the original principal amount of $3,000,000.00 in favor of Lender evidencing the Loan (as may be amended, supplemented or restated from time to time, the “ Note ”) and (ii) Borrower, IEGC, IEC and Lender entered into that certain Agreement dated June 11, 2012 (as may be amended, supplemented or restated from time to time, the “ Profit Sharing Agreement ”) pursuant to which, among other things, Borrower agreed to pay to Lender a percentage of its Net Profit (as such term is defined therein), and each of Borrower, IEGC, and IEC granted Lender the right to participate in future equity or debt financings.
C. To further secure the Loan, among other things, (i) IEGC executed and delivered that certain Continuing and Unconditional Guaranty dated June 11, 2012 in favor of Lender guaranteeing all indebtedness of Borrower to Lender (as amended, supplemented or restated from time to time, the “ IEGC Guaranty ”), (ii) IEC executed and delivered that certain Continuing and Unconditional Guaranty dated June 11, 2012 in favor of Lender guaranteeing all indebtedness of Borrower to Lender (as amended, supplemented or restated from time to time, the “ IEC Guaranty ”), and (iii) Mathieson executed and delivered that certain Limited Guaranty dated June 11, 2012 in favor of Lender guaranteeing all indebtedness of Borrower to Lender subject to the restrictions contained therein (as amended, supplemented or restated from time to time, the “ Mathieson Guaranty ”, and with the IEGC Guaranty and IEC Guaranty, each a “ Guaranty ” and collectively the “ Guaranties ”). The Loan Agreement, Note, Profit Sharing Agreement, Guaranties and any and all documents related thereto or executed in connection therewith shall be referred to herein as the “ Loan Documents ”.
D. Borrower has requested that Lender grant certain financial accommodations to Borrower, and Lender is willing, although it is under no obligation to do so, to grant the requested financial accommodations on the terms and conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the execution and delivery of this Amendment and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Recitals . Each of the statements, representations and other information contained in the above recitals is expressly incorporated herein, except as set forth above, and is represented by each of the Loan Parties to be true and correct.
2. Definitions .
2.1 Advance Rate . The definition of “Applicable Percentage” in Section 1.1 of the Loan Agreement is hereby amended and restated to read as follows:
““ Applicable Percentage ” shall equal eight five percent (85%).”
2.2 Interest Rate . The definition of “Interest Rate” in Section 1.1 of the Loan Agreement is hereby amended and restated to read as follows:
““ Interest Rate ” shall mean eighteen percent (18%) per annum.”
2.3 Interest Rate . The definition of “Loan” in Section 1.1 of the Loan Agreement is hereby amended and restated to read as follows:
““ Loan ” shall mean the line of credit established in favor of the Borrower in the principal amount of Ten Million and No/100 Dollars ($10,000,000.00) as evidenced by the Note.”
2.4 Interest Rate . The definition of “Note” in Section 1.1 of the Loan Agreement is hereby amended and restated to read as follows:
““ Note ” shall mean that certain Amended and Restated Promissory Note in the principal amount of Ten Million and No/100 Dollars ($10,000,000.00), dated November 12, 2013, executed and delivered by the Borrower to evidence the Loan, as such note may be amended, modified or supplemented from time to time.”
2.5 Interest Rate . The definition of “Revolving Credit Limit” in Section 1.1 of the Loan Agreement is hereby amended and restated to read as follows:
““ Revolving Credit Limit ” shall mean Ten Million and No/100 Dollars ($10,000,000.00).”
2.6 Conversion Date . The definition of “Term Conversion Date” in Section 1.1 of the Loan Agreement is hereby amended and restated to read as follows:
““ Term Conversion Date ” shall mean June 30, 2014.”
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3. Advances . Section 2.2 of the Loan Agreement is hereby deleted in its entirety and replaced with the following provision:
“ 2.2 Availability Period. Provided that no Event of Default shall exist or be continuing, during the Availability Period, and upon five (5) Business Days’ prior written notice to the Lender, proceeds may be disbursed by the Lender to the Borrower under the Note, repaid by the Borrower, and, upon five (5) Business Days’ prior written notice to the Lender, re-borrowed by the Borrower under the Note until the Term Conversion Date. Notwithstanding anything to the contrary in this Agreement, the Borrower shall not be entitled to borrow under the Note, and the Lender shall not be obligated to advance funds to the Borrower, (a) if the Outstanding Loan Balance exceeds, or the advance requested by the Borrower would cause the Outstanding Loan Balance to exceed, Three Million and No/100 Dollars ($3,000,000.00), without the express written approval of the Lender, in its sole and absolute discretion, or (b) more than two (2) times per thirty (30) day period and unless the Borrower has delivered a Compliance Certificate to the Lender within five (5) days prior to such advance. All advances under this Agreement shall be a minimum amount of Twenty Five Thousand and No/100 Dollars ($25,000.00) and aggregate not more than Five Hundred Thousand and No/100 Dollars ($500,000.00) in any thirty (30) day period; provided , however , the Borrower shall not be entitled to obtain advances aggregating more than Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) in any thirty (30) day period without the Lender’s prior express written approval separate from this Agreement.”
4. Payments . Section 2.5(b) of the Loan Agreement is hereby deleted in its entirety and replaced with the following provision:
“(b) Commencing on July 1, 2014 and continuing on the same day of each and every calendar month thereafter through and including the month in which the Maturity Date occurs, payments of one hundred percent (100%) of the Consumer Loan Proceeds shall be applied to accrued and unpaid interest and the outstanding principal balance of the Loan.”
5. Representation and Warranties . Each of the Loan Parties represents and warrants to Lender that:
5.1 Loan Documents . Except to the extent previously disclosed to Lender in writing, all representations and warranties made and given by the Loan Parties in the respective Loan Documents are true, complete, accurate, and correct, as if given on the Effective Date of this Amendment.
5.2 No Defaults . There is no event which is, or with notice or lapse of time or both would be, a default under the Loan Documents except for those events, if any, that have been disclosed in writing to Lender or waived in writing by Lender,
5.3 No Claims or Defenses . None of the Loan Parties have any claims, offsets, counterclaims, or defenses with respect to: (i) the payment of the Loan; (ii) the payment of any other sums due under the respective Loan Documents; (iii) the performance of such party’s obligations under the respective Loan Documents; or (iv) any liability under any of the Loan Documents.
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5.4 No Duress . This Amendment has been entered into without force or duress, of the free will of each of the Loan Parties. Such Loan Party’s decision to enter into this Amendment is a fully informed decision and the same is aware of all legal and other ramifications of such decision.
5.5 No Novation . This Amendment is not intended by the parties to be a novation of the respective Loan Documents and, except as expressly modified herein, all terms, conditions, rights, and obligations as set out in the respective Loan Documents are hereby reaffirmed and shall otherwise remain in full force and effect as originally written and agreed.
5.6 Due Authorization . Each of the Loan Parties, if an entity, has the requisite corporate power and authority to execute and deliver this Amendment, and to perform its obligations hereunder and under the respective Loan Documents to which it is a party. The execution, delivery and performance by each of the Loan Parties of this Amendment, if an entity, has been duly approved by all necessary corporate action and no other corporate proceedings are necessary to consummate such transactions. The individuals signing this Amendment on behalf of such Loan Parties are duly authorized to enter into this Amendment.
6. Conditions to Effectiveness . This Amendment shall become effective as of the date first written above (the “ Effective Date ”) upon the occurrence of the following conditions:
6.1 Lender shall have received executed counterpart originals of this Amendment from each of the Loan Parties and originals or certified or other copies of such other documents as Lender may request, in its sole discretion, to consummate the transactions contemplated hereby.
6.2 Lender shall have received an Amended and Restated Promissory Note, in form and content acceptable to Lender in its sole discretion (the “ Amended Note ”), executed by Borrower and all other items required for the effectiveness thereof.
6.3 Each Loan Party shall be in compliance with all other terms and conditions of the Loan Documents.
6.4 Lender shall have received evidence that the execution, delivery and performance by each Loan Party of this Amendment and any instrument or agreement required under this Amendment have been duly authorized.
6.5 Borrower shall have paid Lender (i) the amount of $10,000.00 as a modification fee for the Loan and (ii) all attorneys’ fees and costs incurred by Lender with regard to the Loan and this Amendment.
7. No Waiver . This Amendment shall not act as or constitute a waiver of any of Lender’s rights or remedies with regard to any defaults under the Loan Agreement, Note or any other Loan Documents that may exist now or may occur in the future.
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8. Continuing Obligations . Borrower hereby agrees and acknowledges that: (i) nothing herein invalidates or shall impair or release any covenants, conditions, agreements or stipulations in any of the Loan Agreement or other Loan Documents, except as such is modified by the Amendment, and the same shall continue in full force and effect; (ii) nothing herein affects, invalidates, impairs or released it from its obligations to repay any indebtedness to Lender; and (iii) nothing herein shall be deemed a waiver by Lender of any rights it may have against any party with respect to any of the Loan Documents.
9. Confirmation of Collateral; Further Assurances . Borrower hereby (a) confirms to Lender all security interests and liens heretofore granted by it to Lender securing the obligations of Borrower to Lender arising out of the Loan Documents; (b) acknowledges and agrees that all such obligations shall continue to be secured by any and all such security interests and liens; and (c) agrees to execute and deliver to Lender any and all agreements and other documentation and to take any and all actions reasonably requested by Lender at any time to assure the perfection, protection, priority, and enforcement of Lender’s rights under the Loan Documents, including this Amendment, with respect to all such security interests and liens, at Borrower’s sole cost and expense.
10. Borrower’s Reaffirmation . Except as modified hereby, Borrower acknowledges and agrees all of the terms, covenants, and conditions of the Loan Agreement and all other Loan Documents are ratified, reaffirmed, and confirmed and shall continue in full force and effect. All security instruments executed by Borrower or any other Loan Party shall continue to secure the Loan. Should any term or provision of the Loan Agreement or Note conflict with the terms or provisions contained in this Amendment, the terms and provisions of this Amendment shall be controlling. This Amendment is not intended to be, nor shall it be construed to be, a novation or an accord and satisfaction of any other obligation or liability of Borrower to Lender.
11. Guarantors’ Reaffirmation . Each Guarantor hereby (a) acknowledges and consents to the execution, delivery, and performance by Borrower of this Amendment and the Amended Note; (b) warrants and covenants to the Lender that, except to the extent previously disclosed to the Lender in writing, all representations and warranties previously made by Guarantor to the Lender are true, complete, and accurate as of the date of this Amendment; and (c) reaffirms and agrees that the Guaranty to which such Guarantor is party and all other documents and agreements executed and delivered by either such Guarantor or Borrower to the Lender in connection with any indebtedness of Borrower or Guarantor to the Lender, including, without limitation, the Loan Agreement, Note, Profit Sharing Agreement and any other document securing the Loan, are all in full force and effect, without defense, offset, or counterclaim, or alternatively, that any such right of defense, offset or counterclaim is hereby expressly waived.
12. Lender Release . As a material part of the consideration for Lender entering into this Agreement, each of the Loan Parties, for himself, herself or itself and all of his, her or its respective heirs, personal representatives, agents, employees, officers, directors, shareholders, successors and assigns (the “ Releasors ”), hereby remises, releases and forever discharges Lender and its past and present agents, general agents, members, brokers, representatives, heirs, successors, affiliates, subsidiaries, parents, predecessors, assigns, officers, stockholders, directors, principals, attorneys, employees, partners, independent contractors, consultants, experts, administrators, insurers, reinsurers, and indemnitors (collectively, the “ Affiliates ”) of and from any and all, and all manner of, action and actions, cause and causes of action, suits, debts, breaches of duty, other breaches, notes, dues, sums of money, accounts, reckonings, undertakings, bonds, bills, specialties, covenants, contracts, controversies, agreements, guarantees, indemnifications, promises, liens, variances, trespasses, damages, judgments, taxes, interest, penalties, assessments, extents, executions, expenses, claims, demands and liabilities whatsoever of every kind and nature, whether known or unknown, direct or consequential, foreseen or unforeseen, matured or unmatured, developed or undeveloped, discoverable or undiscoverable, whether or not well-founded in fact or in law, and whether in law or equity or otherwise, which any of the Releasors ever had or now have against any or all of Lender or its Affiliates.
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13. Charges . Each of the Loan Parties further acknowledges and agrees that all interest or other fees or charges which have been imposed, accrued or collected by Lender (including all of its predecessors) under the Loan Documents or in connection with the Loan through the date of this Amendment, and the method of computing the same, were and are proper and agreed to, and were properly computed and collected.
14. Severability; Waivers . If any part of this Amendment is not enforceable, the rest of the Amendment may be enforced. Lender retains all rights, even if it makes an advance after default. Any consent or waiver under this Amendment must be in writing.
15. Headings . Article and paragraph headings are for reference only and shall not affect the interpretation or meaning of any provisions of this Amendment.
16. Counterparts . This Amendment may be executed in as many counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same agreement. Delivery of an executed counterpart of this Amendment (or of any agreement or document required by this Amendment and any amendment to this Amendment) by telecopy or other electronic imaging means shall be as effective as delivery of a manually executed counterpart of this Amendment; provided, however, that the telecopy or other electronic image shall be promptly followed by an original if required by Lender.
17. FINAL AGREEMENT. THIS WRITTEN AMENDMENT REPRESENTS THE FINAL AGREEMENT BETWEEN AND AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.
[Signature page to First Amendment to Loan and Security Agreement]
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SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Second Amendment to Loan and Security Agreement (this “Second Amendment”) dated as of June 30, 2014 (the “Effective Date”) is made by and between BFG INVESTMENT HOLDINGS, LLC, a Delaware limited liability company (“Lender”), IEC SPV, LLC, a Delaware limited liability company (“Borrower”), INVESTMENT EVOLUTION GLOBAL CORPORATION, a Delaware corporation (“IEGC”), INVESTMENT EVOLUTION CORPORATION, a Delaware corporation (“IEC”), and PAUL J. MATHIESON, an individual (“Mathieson”, and with IEGC and IEC, each a “Guarantor” and collectively the “Guarantors”, and together with Borrower and Guarantors, each a “Loan Party” and collectively the “Loan Parties”).
RECITALS
A. Borrower and BFG Loan Holdings, LLC, a Florida limited liability company (“BLH”) entered into that certain Loan and Security Agreement dated June 11, 2012 (the “Loan and Security Agreement”) and subsequently entered into a First Amendment to Loan and Security Agreement dated November 12, 2013 (the “First Amendment”) amending the Loan and Security Agreement (the Loan and Security Agreement as amended by the First Amendment sand as it may be amended, supplemented or restated from time to time is referred to herein as the “Loan Agreement”) with respect to a line of credit from BLH to Borrower up to the original principal amount of $3,000,000.00 which, pursuant to the First Amendment, was increased to a principal amount of up to $10,000,000.00 (the “Loan”). All capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.
B. Pursuant to the Loan Agreement, (i) Borrower executed and delivered to BLH that certain Promissory Note dated June 11, 2012 in the original principal amount of $3,000,000.00 in favor of Lender (the “June 11, 2012 Note”) and an Amended and Restated Promissory Note dated November 12, 2013 in the original principal amount of $10,000,000.00 (the November 12, 2013 Note”) evidencing the Loan (the June 11, 2012 Note as amended and Restated by the November 12, 2013 Note and as it may be amended, supplemented or restated from time to time is referred to herein as the “Note”), and (ii) Borrower, IEGC, IEC and BLH entered into that certain Agreement dated June 11, 2012 (such agreement as it may be amended, supplemented or restated from time to time is herein referred to as the “Profit Sharing Agreement”) pursuant to which, among other things, Borrower agreed to pay to BLH a percentage of its Net Profit (as such term is defined therein), and each of Borrower, IEGC, and IEC granted BLH the right to participate in future equity or debt financings.
C. To further secure the Loan, among other things, (i) IEGC executed and delivered that certain Continuing and Unconditional Guaranty dated June 11, 2012 in favor of BLH guaranteeing all indebtedness of Borrower to BLH (such guaranty as it may be amended, supplemented or restated from time to time is referred to herein as the “IEGC Guaranty”), (ii) IEC executed and delivered that certain Continuing and Unconditional Guaranty dated June 11, 2012 in favor of BLH guaranteeing all indebtedness of Borrower to BLH (such guaranty as it may be amended, supplemented or restated from time to time is referred to herein as the “IEC Guaranty”), and (iii) Mathieson executed and delivered that certain Limited Guaranty dated June 11, 2012 in favor of BLH guaranteeing all indebtedness of Borrower to BLH subject to the restrictions contained therein (such guaranty as amended, supplemented or restated from time to time is referred to herein as the “Mathieson Guaranty”, and with the IEGC Guaranty and IEC Guaranty, each a “Guaranty” and collectively the “Guaranties”). The Loan Agreement, Note, Profit Sharing Agreement, Guaranties and any and all documents related thereto or executed in connection therewith are collectively referred to herein as the “Loan Documents”.
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D. BLH, pursuant to an assignment dated April 1, 2014, transferred all of its right, title and interest in, to and under the Loan Agreement and the other Loan Documents to Lender.
E. Borrower and Lender desire to amend the Loan Agreement in certain respects as set forth in this Second Amendment subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the execution and delivery of this Second Amendment and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. Term Conversion Date . The definition of “Term Conversion Date” in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:
“Term Conversion Date” shall mean the date that the Borrower is deemed to have received notice from the Lender (as determined in accordance with Section 9.6 of this Agreement) of the Lender’s election to convert the line of credit to a term loan or, if a later date for conversion is specified in the notice, such later date.”
2. Availability Period . Section 2.2 of the Loan Agreement is deleted in its entirety and the following is inserted in lieu thereof:
“2.2 Availability Period. Provided that no Event of Default shall exist or be continuing, during the Availability Period, and upon five (5) Business Days’ prior written notice to the Lender, proceeds may be disbursed by the Lender to the Borrower under the Note, repaid by the Borrower, and, upon five (5) Business Days’ prior written notice to the Lender, re-borrowed by the Borrower under the Note until the Term Conversion Date; provided, however, that the Borrower shall not be entitled to borrow under the Note, and the Lender shall not be obligated to advance funds to the Borrower, (a) more than one (1) time per thirty (30) day period and unless the Borrower has delivered a Compliance Certificate to the Lender within five (5) days prior to such advance and (b) unless the Lender, in its sole and absolute discretion, approves such advance of funds to the Borrower. All advances under this Agreement shall be a minimum amount of Twenty Five Thousand and No/100 Dollars ($25,000.00) and not more than Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00). Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to borrow under the Note, and the Lender shall not be obligated to advance funds to the Borrower, on or after the Term Conversion Date.”
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3. Conversion to Term Loan . Section 2.3 of the Loan Agreement is deleted in its entirety and the following is inserted in lieu thereof:
“ 2.3 Conversion to Term Loan . Unless this Agreement shall be terminated sooner as provided herein, the line of credit shall automatically convert to a term loan on the Term Conversion Date. After such conversion, all of the provisions of this Agreement applicable to the Loan immediately prior to such conversion shall continue to apply including (i) the provisions terminating the Availability Period on the Term Conversion Date provided in Section 2.2 and the definition of Availability Period in Section 1.1 of this Agreement and (ii) the payment provision provided for in Section 2.5(b) of this Agreement.”
4. Amendment of Section 2.5(b) . Section 2.5(b) of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:
“(b) Commencing on the Term Conversion Date and continuing on the same day of each and every calendar month thereafter through and including the month in which the Maturity Date occurs, payments of one hundred percent (100%) of the Consumer Loan Proceeds shall be applied to accrued and unpaid interest and the outstanding principal balance of the Loan.”
5. Consent to Assignment . By execution and delivery of this Second Amendment, all of the undersigned parties (a) acknowledge and consent to the assignment effective as of April 1, 2014 by BLH to Lender of all of BLH’s right, title and interest in, to and under the Loan Agreement and the other Loan Documents and (b) agree that, effective as of April 1, 2014, Lender shall be treated for all purposes of the Loan Documents as the lender under the Loan Documents with all the rights and powers that BLH had immediately prior to such assignment.
6. Representation and Warranties . Each of the Loan Parties represents and warrants to Lender that:
6.1 Loan Documents . Except to the extent previously disclosed to Lender or BLH in writing, all representations and warranties made and given by the Loan Parties in the respective Loan Documents are true, complete, accurate, and correct, as if given on the Effective Date.
6.2 No Defaults . There is no event which is, or with notice or lapse of time or both would be, a default under the Loan Documents except for those events, if any, that have been disclosed in writing to Lender or BLH or waived in writing by Lender or BLH.
6.3 No Claims or Defenses . None of the Loan Parties have any claims, offsets, counterclaims, or defenses with respect to: (i) the payment of the Loan; (ii) the payment of any other sums due under the respective Loan Documents; (iii) the performance of such party’s obligations under the respective Loan Documents; or (iv) any liability under any of the Loan Documents.
6.4 No Duress . This Second Amendment has been entered into without force or duress, of the free will of each of the Loan Parties. Each Loan Party’s decision to enter into this Second Amendment is a fully informed decision and the same is aware of all legal and other ramifications of such decision.
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6.5 No Novation . This Second Amendment is not intended by the parties to be a novation of the respective Loan Documents and, except as expressly modified herein, all terms, conditions, rights, and obligations as set out in the respective Loan Documents are hereby reaffirmed and shall otherwise remain in full force and effect as originally written and agreed.
6.6 Due Authorization . Each of the Loan Parties, if an entity, has the requisite corporate power and authority to execute and deliver this Second Amendment, and to perform its obligations hereunder and under the respective Loan Documents to which it is a party. The execution, delivery and performance by each of the Loan Parties of this Second Amendment, if an entity, has been duly approved by all necessary corporate action and no other corporate proceedings are necessary to consummate such transactions. The individuals signing this Second Amendment on behalf of such Loan Parties are duly authorized to enter into this Second Amendment.
7. Conditions to Effectiveness . This Second Amendment shall become effective as of the Effective Date upon the occurrence of the following conditions:
7.1 Executed Second Amendment . Lender shall have received executed counterpart originals of this Second Amendment from each of the Loan Parties and originals or certified or other copies of such other documents as Lender may request, in its sole discretion, to consummate the transactions contemplated hereby.
7.2 Compliance with Loan Documents . Each Loan Party shall be in compliance with all other terms and conditions of the Loan Documents.
7.3 Evidence of Authorization . Lender shall have received evidence that the execution, delivery and performance by each Loan Party of this Second Amendment and any instrument or agreement required under this Second Amendment have been duly authorized.
8. No Waiver . This Second Amendment shall not act as or constitute a waiver of any of Lender’s rights or remedies with regard to any defaults that may exist now or may occur in the future under the Loan Agreement, Note or any other Loan Document.
9. Continuing Obligations . Borrower hereby agrees and acknowledges that: (i) nothing herein invalidates or shall impair or release any covenants, conditions, agreements or stipulations in the Loan Agreement or any other Loan Document, except as such is modified by this Second Amendment, and the same shall continue in full force and effect; (ii) nothing herein affects, invalidates, impairs or releases Borrower from its obligations to repay any indebtedness to Lender; and (iii) nothing herein shall be deemed a waiver by Lender of any rights it may have against any party with respect to any of the Loan Documents.
10. Confirmation of Collateral; Further Assurances . Borrower hereby (a) confirms to Lender all security interests and liens heretofore granted by it to Lender securing the obligations of Borrower to Lender arising out of the Loan Documents; (b) acknowledges and agrees that all such obligations shall continue to be secured by any and all such security interests and liens; and (c) agrees to execute and deliver to Lender any and all agreements and other documentation and to take any and all actions reasonably requested by Lender at any time to assure the perfection, protection, priority, and enforcement of Lender’s rights under the Loan Documents, including this Second Amendment, with respect to all such security interests and liens, at Borrower’s sole cost and expense.
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11. Borrower’s Reaffirmation . Except as modified hereby, Borrower acknowledges and agrees that all of the terms, covenants, and conditions of the Loan Agreement and all other Loan Documents are ratified, reaffirmed, and confirmed and shall continue in full force and effect. All security instruments executed by Borrower or any other Loan Party shall continue to secure the Loan. Should any term or provision of the Loan Agreement or Note conflict with the terms or provisions contained in this Second Amendment, the terms and provisions of this Second Amendment shall be controlling. This Second Amendment is not intended to be, nor shall it be construed to be, a novation or an accord and satisfaction of any obligation or liability of Borrower to Lender.
12. Guarantors’ Reaffirmation . Each Guarantor hereby (a) acknowledges and consents to the execution, delivery, and performance by Borrower of this Second Amendment; (b) warrants and covenants to Lender that, except to the extent previously disclosed to Lender or BLH in writing, all representations and warranties previously made by Guarantor to Lender are true, complete, and accurate as of the date of this Second Amendment; and (c) reaffirms and agrees that the Guaranty to which such Guarantor is party and all other documents and agreements executed and delivered by either such Guarantor or Borrower to Lender in connection with any indebtedness of Borrower or Guarantor to Lender, including, without limitation, the Loan Agreement, Note, Profit Sharing Agreement, any other Loan Document, and any other document securing the Loan, are all in full force and effect, without defense, offset, or counterclaim, or alternatively, that any such right of defense, offset or counterclaim is hereby expressly waived.
13. Lender Release . As a material part of the consideration for Lender entering into this Agreement, each of the Loan Parties, for himself, herself or itself and all of his, her or its respective heirs, personal representatives, agents, employees, officers, directors, shareholders, successors and assigns (the “Releasors”), hereby remises, releases and forever discharges Lender and BLH and their respective past and present agents, general agents, members, brokers, representatives, heirs, successors, affiliates, subsidiaries, parents, predecessors, assigns, officers, stockholders, directors, principals, attorneys, employees, partners, independent contractors, consultants, experts, administrators, insurers, reinsurers, and indemnitors (collectively, the “Affiliates” ) of and from any and all, and all manner of, action and actions, cause and causes of action, suits, debts, breaches of duty, other breaches, notes, dues, sums of money, accounts, reckonings, undertakings, bonds, bills, specialties, covenants, contracts, controversies, agreements, guarantees, indemnifications, promises, liens, variances, trespasses, damages, judgments, taxes, interest, penalties, assessments, extents, executions, expenses, claims, demands and liabilities whatsoever of every kind and nature, whether known or unknown, direct or consequential, foreseen or unforeseen, matured or unmatured, developed or undeveloped, discoverable or undiscoverable, whether or not well-founded in fact or in law, and whether in law or equity or otherwise, which any of the Releasors ever had or now have against any or all of Lender, BLH or their respective Affiliates.
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14. Charges . Each of the Loan Parties further acknowledges and agrees that all interest or other fees or charges which have been imposed, accrued or collected by Lender or BLH (including all of their respective predecessors) under the Loan Documents or in connection with the Loan through the date of this Second Amendment, and the method of computing the same, were and are proper and agreed to, and were properly computed and collected.
15. Severability; Waivers . If any part of this Second Amendment is not enforceable, the rest of this Second Amendment may be enforced. Lender retains all rights, even if it makes an advance after default. Any consent or waiver under this Second Amendment must be in writing.
16. Headings . Article and paragraph headings are for reference only and shall not affect the interpretation or meaning of any provisions of this Second Amendment.
17. Counterparts . This Second Amendment may be executed in as many counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same agreement. Delivery of an executed counterpart of this Second amendment (or of any agreement or document required by this Second Amendment and any amendment to this Second Amendment) by telecopy or other electronic imaging means shall be as effective as delivery of a manually executed counterpart of this Second Amendment; provided, however, that the telecopy or other electronic image shall be promptly followed by an original if required by Lender.
18. FINAL AGREEMENT . THIS WRITTEN SECOND AMENDMENT REPRESENTS THE FINAL AGREEMENT BETWEEN AND AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF , the undersigned parties have caused this Second Amendment to be duly executed and delivered as of the day and year first above written.
IEC SPV, LLC | INVESTMENT EVOLUTION CORPORATION | |||
By: | /s/ Paul J. Mathieson | By: | /s/ Paul J. Mathieson | |
Name: | Paul J. Mathieson | Name: | Paul J. Mathieson | |
Its: | Managing Member | Its: | President | |
BFG INVESTMENT HOLDINGS, LLC | INVESTMENT EVOLUTION GLOBAL CORPORATION | |||
By: | By: | /s/ Paul J. Mathieson | ||
Name: | John Fernando | Name: | Paul J. Mathieson | |
Its: | President | Its: | President | |
Acknowledged: | /s/ Paul J. Mathieson | |||
Paul J. Mathieson, Guarantor | ||||
BFG LOAN HOLDINGS, LLC | ||||
By: | ||||
Name: | John Fernando | |||
Its: | President |
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Exhibit 21.1
IEG Holdings Corporation
Subsidiaries of the Registrant
Entity Name | Place of Incorporation | |
Investment Evolution Global Corporation | Delaware | |
Investment Evolution Corporation | Delaware | |
Investment Evolution Australia Corporation | Delaware | |
IEC SPV, LLC | Delaware |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the inclusion in the Registration Statement on Form S-1 of IEG Holdings Corporation of our report dated April 11, 2014 with respect to the consolidated financial statements of IEG Holdings Corporation as of December 31, 2013 and 2012, and for each of the two years in the period ended December 31, 2013.
We also consent to the reference to our Firm under the caption “Experts” in such Registration Statement.
Rose, Snyder & Jacobs LLP
Encino, California
December 11, 2014