Business Context and Reporting Period
Company: SANUWAVE Health, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: November 27, 2012
Event: Unregistered Sales of Equity Securities (Item 3.02)
Key Financial Metrics
This filing reports a specific capital raise transaction rather than periodic financial performance metrics (revenue, profit, or cash flow).
| Metric | Value |
|---|---|
| Shares Issued | 4,000,000 |
| Price Per Share | $0.25 |
| Total Aggregate Sales Price | $1,000,000 |
| Initial Payment Due | $50,000 (by Jan 31, 2013) |
Material Changes and Transaction Details
The Company entered into a Subscription Agreement with David N. Nemelka to sell 4,000,000 shares of common stock. The transaction relies on an exemption from registration under Rule 506 of the Securities Act of 1933.
Payment Schedule:
- First Installment: $50,000 due on or before January 31, 2013.
- Second Installment: $50,000 due on or before February 15, 2013.
- Remaining Balance: $900,000 due on or before May 27, 2014.
Discretionary Payments: The Subscriber may make additional payments in minimum installments of $100,000 at their discretion until the Outside Due Date.
Liquidity Demand Provision: If the Company's total available cash falls below $100,000 after February 15, 2013, the Company may demand payment of $100,000 from the outstanding balance. The Subscriber must pay within 30 days of demand. The Company may make multiple demands but is limited to one notice per 30-day period.
Related Party and Risks
Related Party Transaction: The Subscriber, David N. Nemelka, is the brother of John F. Nemelka, a member of the Company's board of directors.
Risks and Contingencies:
- The full $1,000,000 is not immediately received; the majority ($900,000) is deferred until 2014.
- The Company's ability to access the remaining funds is partially contingent on its cash position triggering a demand provision.
Investor Verification Checklist
- Verify the receipt of the initial $50,000 payment by January 31, 2013.
- Confirm the status of the second $50,000 payment due February 15, 2013.
- Monitor the Company's cash balance post-February 2013 to assess if the liquidity demand provision is triggered.
- Review the full text of the Subscription Agreement (Exhibit 10.1) for additional covenants or restrictions.
- Confirm the issuance of the 4,000,000 shares and the updated share count in subsequent filings.