Deal funds military fighter aircraft lease deposit, business purposes
By Devika Patel
Knoxville, Tenn., April 5 - Tactical Air Defense Services, Inc. executed a binding letter of intent with Cornucopia, Ltd. for a $1 million equity financing on April 1, according to an 8-K filed Tuesday with the Securities and Exchange Commission.
The company will receive an initial tranche of $400,000 and a subsequent financing of up to $600,000 when requested. The investor also will have a right of participation in the company's operating profits.
The initial $400,000 tranche will consist of 12% preferred shares, which will be convertible into 533,333,200 restricted common shares and will maintain votes as if the preferreds were already converted.
The first tranche also will include two one-year warrants for a total of 1,333,333,200 common shares. The first warrant, for 533,333,200 shares, is exercisable at $0.00075. The second warrant, for 800 million shares, will be exercisable at the lesser of 50% of the average closing price of the stock for the 30 trading days preceding the exercise or $0.0025.
The subsequent tranches, for up to $600,000, will also consist of 12% preferreds, which will be convertible into shares at a conversion price equal to 50% of the average closing price of the stock for the 30-day period preceding each tranche. These preferreds, too, will maintain votes as if they had already been converted.
The proceeds of the first tranche, which is expected to settle in five days, will be used as a deposit for a certain military fighter aircraft that the company plans to lease, as well as for other general business purposes.
Tactical Air Defense is a is a Carson City, Nev., aerospace/defense services contractor that offers tactical aviation services, aerial refueling, aircraft maintenance and other aerospace and defense services to the United States and foreign militaries and agencies.
| Issuer: | Tactical Air Defense Services, Inc.
|
| Issue: | Preferred stock
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| Amount: | $1 million
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| Dividends: | 12%
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| Conversion ratio: | Into 533,333,200 common shares (first, $400,000 tranche)
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| Warrants: | For 1,333,333,200 shares (first, $400,000 tranche)
|
| Warrant expiration: | One year
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| Warrant strike prices: | $0.00075 (for 533,333,200 shares), lesser of 50% of the average closing price of the stock for the 30 trading days preceding the exercise or $0.0025 (for 800 million shares)
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| Investor: | Cornucopia, Ltd.
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| Pricing date: | April 1
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| Stock symbol: | Pink Sheets: TADF
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| Market capitalization: | $3.44 million
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