US Lighting Group (USLG), the parent company of RV manufacturer Cortes Campers, reached an agreement to sell up to $1 million of the company’s common stock to Alumni Capital Management.
Alumni calls itself a millennial hedge fund consisting of alumni and students from around the country.
The agreement comes two months after two USLG executives took out personal loans and made the funds available to the business during a spring capital shortage.
USLG CEO Anthony Corpora said: “I am excited to announce that USLG, which is rapidly transforming into a leading manufacturer of innovative composite outdoor products, has reached an agreement with Alumni Capital Management to acquire up to $1.0 million in our stock. Alumni Capital is known for investing in unique microcap growth stories and has come to appreciate our stage of development and near-term outlook.”
USLG stock was trading at 7.7 cents a share before the markets opened Thursday. The purchase agreement says Alumni’s price for stock purchases will equal 80% off the lowest traded stock price during the six business days prior to the sale closing. If the purchase was made Thursday, the price would be 6.2 cents a share.
At that price, if Alumni acquired $1 million in stock, the fund would buy about 16.129 million USLG shares. With about 101.61 million shares outstanding, according to Yahoo Finance, Alumni would control about 15.9% of USLG shares.
Alumni has not yet purchased any shares, and future purchases are subject to various limitations and contingencies.
“Our top-line expansion continues unabated, but we need capital to accelerate production and meet increasing demand,” Corpora said. “We look forward to working with Alumni going forward to serve our customers and invigorate the North American RV market.”
In a filing with the Securities and Exchange Commission, USLG said the company experienced capital shortages this spring while expanding production, despite generating revenues and a first-quarter profit. USLG reported $1,205,235 in first-quarter sales and $24,769 in first-quarter profits.
To shore up USLG’s capital standing, Corpora and Michael Coates, corporate controller, took out personal loans and made the funds available to USLG. Coates accessed a $50,000 loan May 4 and Corpora accessed a $97,920 loan May 24. USLG entered into agreements July 17 with Coates and Corpora to repay the personal loans.
Finally, the purchase agreement issued stock warrants to Alumni for up to 6.666 million shares. The warrants have a five-year term and when the agreement was signed July 14, the exercise price was 14.7 cents a share.