Draper Oakwood (DOTA) Releases Additional Details on Backstops
by Kristi Marvin on 2018-12-17 at 10:22am

This morning, Draper Oakwood Technology (DOTA), put out an 8-K with additional details on their two backstop arrangements to secure their combination with Reebonz.  Notably, the two backstop investors are S-4 Limited, which agreed to acquire 1,000,000 shares in the open market on Friday, and Vertex, which agreed to acquire $5 million worth of shares in the open market on Friday.  Plus, the broker facilitating both of these transaction has been listed as Cowen.

As for those volume and sale limitations, the amount sold by Cowen, shall not exceed the greatest of: (a) one-quarter percent (0.25%) of the Ordinary Shares outstanding; or (b) one quarter (1/4) of the average weekly reported volume of trading in the Ordinary Shares during the four (4) calendar weeks preceding the date of the sale.

Plus, in the event that the price per share for any sale of securities is to be less than $6.00 per share, the Broker shall first offer the company the right (for a period of two (2) trading hours) to purchase the shares at the then current market price rather than selling the shares in the open market. However, given that DOTA is already trading below $6.00 this morning and they haven’t even gotten to the vote yet, it sounds like the company might be making a lot of purchases.

Basically, this is a great deal for S-4, Vertex and Cowen, and pretty much nobody else. And that includes DOTA and Reebonz.  The conversations happening right now between DOTA and Reebonz must be pretty interesting…to say the least.  We still have two more days until the vote…let’s see what happens.

 

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