Live Current private placement dilutes shareholders 15% to 28%

By , August 2, 2010

As observed in DomainNameWire today, Live Current completed a private placement, selling 74 units consisting of 50,000 shares each for total proceeds of $370,000. Based on the current shares outstanding (roughly 24,000,000) this amounts to a 15% dilution of current shareholders. The units also include warrants to purchase an equal number of shares at .15 within 2 years. If Live Current manages to lift the stock price above that level, it will further dilute shareholders another 13%, based on the the number of shares outstanding of 27,700,000.

The DNW article also outlined various terms of Paul Morrison’s terms of employment, who has been brought on to run Live Current’s flagship property: In addition to the salary and options and equity stakes mentioned there, Mr. Morrison is also eligible for a 50% bonus. Morrison’s options also account for another 4% of Live Current, and 5% of

It is obvious Live Current remains steadfast in their intent to turn things around. Transitioning from a discount etailer to a luxury destination seems to be going against the current economic tide, where a second dip into recession seems imminent and discretionary spending on luxury items would seem sure to be affected. If anything online outlets should be shifting toward discounted outlets, not away from it.

The bid/ask spread on LIVC blew out to 0.08 x 0.15 today and tacked on a couple pennies to chip in what was probably a single 900 share trade at .12. Short term fluctuations aside, as long as LIVC pursues the more-or-less same business plans that didn’t get them anywhere before, this still looks to be a value trap.

I posted previously that Live Current may be better served slimming things right down, liquidating and returning capital to shareholders, but I don’t expect that option to be taken seriously. At least until the next shoe drops in the global recession.

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