3,987,522 shares of Common Stock were, as of February 28, 2014 (the “February Settlement Date”), the maximum amount of shares of Common Stock that could be owned directly by IBC Funds LLC (the “IBC”) pursuant to three orders (the “Orders”) entered by the Circuit Court of the Twelfth Judicial Circuit in and for Sarasota County, Florida (the “Court”) approving, among other things, the fairness of the terms and conditions of three exchanges pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, in accordance with three settlement agreements and stipulations (the “Settlement Agreements”) between the Issuer and IBC in the matters entitled
IBC Funds LLC v. Speedemissions, Inc.
(the “Actions”). IBC commenced the Actions against the Issuer on December 10, 2013, January 7, 2014, and February 27, 2014 to recover, respectively, $71,643.07, $56,694.59, and $77,304.89, in total $205,642.55, of past-due accounts payable of the Issuer, which IBC had purchased from vendors of the Issuer pursuant to terms of separate receivable purchase agreements between IBC and such vendors (the “Claims”). The Orders provide for the full and final settlement of the Claims and the Actions. The Settlement Agreements became effective and binding upon the Issuer and IBC upon execution of the Orders by the Court on December 11, 2013 (the “December Settlement Date”) with respect to the first action, January 8, 2014 (the “January Settlement Date”) with respect to the second action, and the February Settlement Date with respect to the third action.
The Settlement Agreements provide that the total number of shares of Common Stock to be issued to IBC be based upon a specified discount to the lowest sale price of the Common Stock for a specified period of time preceding a share request by IBC. Specifically, the total number of shares of Common Stock to be issued to IBC pursuant to the Settlement Agreements shall be equal to the sum of: (i) the quotient obtained by dividing (A) $205,642.55 (representing the total amount of the Claims), by (B) 40% of the lowest sale price of the Common Stock in the 20 trading days preceding a share request by IBC pursuant to the Settlement Agreements (collectively, the “Total Settlement Shares”).
The Settlement Agreements provide that it is the intention of the parties that the Total Settlement Shares beneficially owned by IBC at any given time shall not exceed the number of shares of Common Stock that, when aggregated with all other shares of Common Stock then beneficially owned by IBC, would result in the beneficial ownership by IBC at any time of more than 9.9% of the Common Stock as would be outstanding on such date, as determined in accordance with Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the regulations promulgated thereunder. The Total Settlement Shares are the only shares of Common Stock IBC owns. For purposes of calculating the percentage of the class, IBC has been informed by the Issuer that there were a total of 40,278,000 shares of Common Stock outstanding on each of the December Settlement Date, the January Settlement Date, and the February Settlement Date. Accordingly, the maximum amount of Total Settlement Shares that could be owned by IBC on the December Settlement Date, the January Settlement Date, and the February Settlement Date each equaled 3,987,522. Prior to all of the Total Settlement Shares being issued to IBC, the maximum amount of Total Settlement Shares that IBC can own is subject to adjustment based on the amount of Common Stock outstanding on any given date.
