seekingalpha.com/symbol/copy.obOur favorite small Patent Monetization company CopyTele (COPY.OB) is on the move, recently adding two acquisitions of patent rights to it's portfolio and announced an incredibly favorable financing deal yesterday. This will bolster its war chest, to show to potential infringers it has the staying power to see any litigation battle to the bitter end -- and not settle for anything less than what it (and its shareholders) fully deserve.
The time to own this stock, is now.
Not to harp on it, but the new management team as a reminder was rewarded for their future efforts, with a compensation package which includes 40 million options, priced at $0.2175.
For every dollar the stock trades higher, they stand the benefit by $40 million dollars. The strike price is less than where the stock trades today. This feature alone, makes this one of our best finds ever. We firmly believe that this is going to develop into one of the biggest and best know patent monetization firms in the world. We firmly believe that.
Average daily volume has tripled since we initiated coverage, while the share price has remained steady. This is our view on that.
While every situation is of course different, in the past when we have seen the volume of trading increase this significantly (without help of an investment banker) that eventually a tipping point arrives, where all of the sudden the asking price backs away -- with any large attempts to purchase stock. For now, if you were to want to buy just 100,000 shares, you can sit on the bid or nibble at the ask. You can play around and take your time. But we believe there will come a day relatively soon, where any attempts to acquire a meaningful stake will have to be done in pieces and laddered up.
As for the financing, note that CopyTele's new business model is not capital intensive. But when going up against a someone like AU Optronics (NYSE:AUO), which has $14 billion in sales last year they need to show they have arrived to the battle with armor piercing bullets and not just blanks. With this potential financing available to tap into, as of today CopyTele is now a genuine force to be dealt with.
As the CEO Robert Berman, (who is easily one of the most well known and talented patent monetization experts on the country) recently said, "We have begun the process of transforming CTI into a world class, publicly traded, patent assertion company." And we believe him. In fact we believe him so much, we signed them up as a client.
We are near completion on detailed report.
1. CopyTele (COPY) $0.20 Announces $10 Million At-the-Market Common Stock Purchase Agreement With Aspire Capital, LLC.
Please note the beauty of this from five important aspects.
1.) Aspire bought 500,000 shares at $0.20. When was the last time you saw a financing relationship start like that for a small cap company? Usually you see the first round, at up to a 50% discount.
2). They don't need to take the money. They can access it when needed, IF NEEDED. And when somebody they're in settlement or licensing negotiations with takes a look at CopyTele's publicly filed financial statements, they are going to see this! It's like a war chest "on-call." A war chest without shareholder dilution.
It's absolutely genius.
3) Any request for money will be done at PREVAILING market prices. So if CopyTele's shares are trading at $1.00, that is what will determine the amount of shares needed to release to Aspire. Not $0.20.
Please read the S-1 filing in its entirety, to learn about fees, commitment shares, volume restrictions etc., but in essence...
"over the two-year term of the Purchase Agreement, we have the right, in our sole discretion, to present Aspire Capital with a purchase notice directing Aspire Capital to purchase up to 200,000 shares of our Common Stock per business day; however, no sale pursuant to such purchase notice may exceed $200,000 per business day. The purchase price per share is the lower of (i) the lowest sale price for our Common Stock on the purchase date or (ii) the arithmetic average of the three lowest closing sale prices for our Common Stock during the 12 consecutive business days ending on the business day immediately preceding the purchase date. The applicable purchase price will be determined prior to delivery of any purchase notice."
4) This does not preclude them from entering into a traditional investment banking relationship. If happy days arrive and CopyTele has successfully taken down a couple giants and the shares are trading at $2.00, they have the right to close this deal and do a traditional secondary with a Goldman Sachs or a regional firm like Dawson James, who financed VirnetX (NYSEMKT:VHC) when it was trading at $2.00.
At a recent National Investment Banking Association conference, we introduced management to four Investment Banking firms all who showed significant interest. We would describe their interest as "waiting in the wings."
5). Aspire Capital is from Chicago our "home-town." So take that New York. Go Cubs.
MELVILLE, NY--(Marketwired - April 24, 2013) - CopyTele, Inc. ("CTI") (COPY), a company specializing in patent monetization, today announced that it has entered into a common stock purchase agreement with the Aspire Capital Fund, LLC, whereby Aspire Capital has committed over the next two years to purchase up to $10 million of CTI's common stock based upon prevailing market prices over a period preceding each sale. In addition, Aspire Capital has made an initial purchase of $500,000 of CTI common stock at a price of $0.20 per share.
Robert Berman, CTI's President and CEO, stated, "We look forward to working with Aspire Capital as a financial partner and long-term investor in CopyTele. This arrangement helps give us the ability to access capital as we need it, and at share prices that will reflect our progress as we continue to implement our strategy of patent monetization."
"Based upon management's track record of successfully monetizing patents, and the progress that CopyTele has made, both in asserting its own patents, and in acquiring additional patent portfolios, we believe that CopyTele has a bright future and are excited to be involved as a long term investor", commented Steven G. Martin, Managing Member of Aspire Capital.
Key aspects of the purchase agreement include:
• CTI initiates and controls the timing and amount of any sales of common stock to Aspire Capital; Aspire Capital has no right to require any sales by the Company.
• The sale prices will be based on the prevailing market price at the time of each sale and CTI will know the sales price before directing Aspire Capital to purchase common stock.
• CTI is not required to sell the entire $10 million of common stock to Aspire Capital.
• There are no limitations on the use of proceeds, financial or business covenants, restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the purchase agreement.
• CTI may terminate the purchase agreement at any time, at its discretion, without any additional cost or penalty.
• CTI will issue shares of its common stock to Aspire Capital as a commitment fee in connection with entering into the purchase agreement.
• There are no warrants issued in connection with the purchase agreement.
A more complete and detailed description of the purchase agreement and other related agreements is set forth in the Company's Registration Statement on form S-1, filed today with the Securities and Exchange Commission.
About CopyTele, Inc.
CopyTele develops and acquires patented technologies for the purposes of patent monetization and patent assertion. The company currently has 6 patent portfolios in the areas of Key Based Encryption, E-Paper® Electrophoretic Display, Nano Field Emission Display ("NFED"), Micro Electro Mechanical Systems Display ("MEMS"), Loyalty Point Conversion Systems, and Window Frame Construction. Additional information is available at CTIpatents.com .
About Aspire Capital Fund LLC
Aspire Capital Fund, LLC is an institutional investor based in Chicago, Illinois with a fundamental investment approach. Aspire Capital invests in a wide range of companies and industries emphasizing life sciences, energy and technology companies.
S-1 Filing: www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9237977
2. CopyTele Acquires Rights to Windows Patent Portfolio.
MELVILLE, NY--(Marketwired - April 18, 2013) - CopyTele, Inc. ("CTI") (COPY) today announced that it has acquired the rights to a patent portfolio covering window frames commonly used in manufactured housing, and replacement windows. The portfolio covers window frames that integrate a feature commonly known in the industry as a "J-channel" or "J-rail," resulting in easier and faster assembly and installation. Estimates are that approximately 40 million windows are sold in the U.S. each year.
Robert Berman, CTI's President and CEO stated, "Our acquisition of the rights to this patent portfolio further adds to and diversifies our patent holdings. We now have 6 diverse patent portfolios in which to focus our patent monetization efforts."
3. CopyTele Acquires Rights to Patent Portfolio Covering Loyalty Programs.
MELVILLE, NY--(Marketwired - April 03, 2013) - CopyTele, Inc. ("CTI") (COPY) (COPY) today announced that its wholly owned subsidiary, CTI Patent Acquisition Corporation, has acquired the rights to a patent portfolio relating to loyalty awards programs commonly provided by airlines, credit card companies, hotels, retailers, casinos, and others. The portfolio covers the conversion of non-negotiable, loyalty awards points into negotiable funds used to purchase goods and services from third parties, and the conversion of awards points into points and awards provided by other loyalty program providers. Estimates indicate that there are over 2 billion memberships to loyalty awards programs in the United States.
Robert Berman, CTI's President and CEO stated, "Our acquisition of the rights to these 13 patents fits perfectly with our strategy of building a diversified collection of patent portfolios with significant monetization potential. We have begun the process of transforming CTI into a world class, publicly traded, patent assertion company."
DISCLAIMER. Forward-Looking Statements: Statements that are not historical fact may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, but rather reflect CopyTele's current expectations concerning future events and results. We generally use the words "believes," "expects," "intends," "plans," "anticipates," "likely," "will" and similar expressions to identify forward-looking statements. Such forward-looking statements, including those concerning our expectations, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, those factors set forth in "Item 1A - "Risk Factors and other sections of our Annual Report on Form 10-K for the fiscal year ended October 31, 2012 as well as in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this press release. CopyTele is a client of Institutional Analyst Inc., and we have been compensated with twenty five hundred dollars per month and five-hundred thousand restricted shares from the company to provide various investor relation services including the publication and distribution of the report mentioned herein.
Disclosure: I am long COPY.OB.
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