DAIS ANALYTIC CORP (DLYT) SPO
|Company Name||DAIS ANALYTIC CORP|
|Company Address||11552 PROSPEROUS DRIVE
ODESSA, FL 33556
|CEO||Timothy N. Tangredi|
|Employees (as of 3/5/2012)||29|
|State of Inc||--|
|Fiscal Year End||12/31|
|Shares Over Alloted||0|
|Shareholder Shares Offered||--|
|Lockup Period (days)||180|
|Quiet Period Expiration||4/16/2012|
We estimate the gross proceeds from the sale of 40,000,000 shares of common stock, prior to deducting commissions to any placement agents we may retain In such an event, we estimate that we will receive net proceeds of $9.50 million, after deducting placement agent commissions, if any, and estimated expenses of approximately $900,000, which includes legal, accounting, printing costs and various fees associated with the registration of our shares. However, there is not a minimum number of shares that must be sold in this offering. Therefore, the proceeds of this offering will be immediately available for use by us and we do not have to wait until a minimum number of shares have been sold to use the proceeds from any sales. In the event we sell the following percent of the total number of shares offered at the offering price of $0.26 per share we anticipate using the proceeds (after deducting placement agent commissions, if any, and estimated expenses including all legal, accounting, printing costs and various fees associated with the registration of our shares) as follows: IF 25% OF IF 50% OF IF 75% OF IF 100% OF SHARES SOLD SHARES SOLD SHARES SOLD SHARES SOLD GROSS PROCEEDS FROM THIS OFFERING $ 2,168,000 $ 4,612,000 $ 7,056,000 $ 9,500,000 LESS: OFFERING EXPENSES Working Capital and General Corporate Purposes (1) 525,000 697,000 1,448,000 1,975,000 Marketing, Research and Development (2) 1,050,000 2,005,000 3,922,000 Repayment of Secured Convertible Note (3) 1,643,000 1,643,000 1,643,000 1,632,000 Repayment of Unsecured Convertible Note (3) 1,222,000 1,222,000 1,222,000 Payment of Employee Accrued Salaries (4) 358,000 358,000 Payment of CEO Accrued Salary (5) 380,000 380,000 TOTALS $ 2,168,000 $ 4,612,000 $ 7,056,000 $ 9,500,000 (1) Among other expenses, we will use proceeds to conduct a national search to identify and hire a Chief Operating Officer with experience within our industry by the end of the second quarter of 2012 if we are able to identify an appropriate candidate with the requisite qualifications. (2) Includes proceeds to be applied to a portion of the estimated marketing , research and development costs relating to the commercialization of our ConsERV TM, NanoClear™, NanoAir™ and ultracapacitor applications. This amount represents a current estimate, and is subject to change depending on various factors discussed below. (3) Assumes repayment in cash, of convertible notes outstanding in the aggregate principal amount of $2,500,000 plus accrued interest at the rate of 10% per annum, which are held by Platinum Montaur Life Sciences, LLC (Platinum Montaur). The proceeds from these notes were used for working capital, research and development expenses and general corporate purposes. These notes mature on March 22, 2012, and are convertible into common stock at a conversion price of $0.26 per share. These notes are subject to certain limitations on conversion to the extent the shares resulting from such conversion, when aggregated with all other shares of common stock owned by Platinum Montaur at such time, would result in Platinum Montaur holding in xcess of 9.99% of all our common stock. Because of these limitations we estimate that as ofMarch 5, 2012 approximately $2.87 million of net proceeds from the offering will be used to repay principal and interest under these notes. In the event all of the shares of this offering are not sold, we shall attempt to renegotiate the terms of one or both convertible notes to extend the maturity date(s) or convert, in full or in part, the principal and accrued interest of the note(s) to stock upon terms acceptable to us. If we are successful in renegotiating the convertible note(s), we shall use the proceeds allotted above for the repayment of the note(s) to fund the other uses described in the same order and proportion as indicated. (4) Includes payment in the amount of approximately $348,000 to repay the outstanding accrued salary and expenses of our general counsel, Ms. Patricia Tangredi and approximately $10,000 to repay the outstanding accrued salary of our Vice President of Sales and Marketing, Mr. David Longacre. (5) We have entered into an agreement with our CEO, Tim Tangredi, that provides that upon receipt of $6 million in gross proceeds from the offering Mr. Tangredi’s accrued compensation through the closing date in the approximate amount of $1.05 million shall be paid with a combination of (a) cash, which we estimate at this time to be approximately $380,000, which is intended to cover payment of income and other taxes due from the payment of such accrued compensation, and (b) shares of restricted common stock at the price per share paid by investors in the public offering (which for the purpose of the above calculation would consist of an estimated 2,568,785 shares of common stock). The amounts that will actually be spent by us for any specific purpose may vary significantly, and will depend on a number of factors including but not limited to the pace of progress of our commercialization and development efforts, actual needs with respect to product testing, development and research, market conditions, and changes in or revisions to our marketing strategies. We will have significant discretion in the use of any net proceeds. Investors will be relying on the judgment of our management regarding the application of the proceeds of any sale of our common stock. We may invest the net proceeds temporarily until we use them for their stated purpose.
We believe the efficacy of our value-added products and technology has the ability to decrease sales of competing products, thus taking business away from more established firms using older technology. We believe that our ConsERV TM product may become a functional component of newer, more efficient OEM products. Our key challenge is to educate channel decision makers of the benefits of products made using our materials and processes to overcome the strength of the current product sales. There are a number of companies located in the United States, Canada, Europe and Asia that have been developing and selling technologies and products in the energy recovery industry, including but not limited to: Semco, Greenheck, Venmar, Bry-Air, dPoint, Renewaire and AirXchange. We will experience significant competition regarding our products because certain competing companies possess greater financial and personal resources than us. Future product competitors include, but are not limited to: Products Current and Future Competitors ConsERV TM Semco, Greenheck, Venmar, Bry-Air, dPoint, Renewaire and AirXchange. NanoClear TM Dow, Siemens, GE NanoAir TM AAON, Trane, Carrier, York, Hier, Mitsubishi, LG Ultracapacitor Maxwell, Ioxus, B&D We believe that the combination of our nano-material platform’s characteristics (high selectivity, high flux rate, manufacturability, et al.), growing patent position, and possible ‘first to market’ position, are competitive advantages, which may allow us time to execute our business plan. Competitors may experience barriers to entry in these markets primarily related to the lack of similarly performing proprietary materials and processes.
We have developed and are commercializing specialty nano-structured polymer materials (Aqualyte TM). Using Aqualyte TM materials we are creating value added products which are designed to: (i) improve the energy efficiency in Heating, Ventilation and Air Conditioning (HVAC) equipment, (ii)
replace the chemical refrigerants used in todayfs HVAC systems as well as most all forms of refrigeration systems; (iii) remove impurities in contaminated water (such as waste water and seawater); and (iv) allow the storage of electrical energy in a device called an gultracapacitor.h Dais first commercial product, ConsERV, is a fixed plate energy recovery ventilator unit that attaches to most all forms of HVAC equipment. Through use of the Aqualyte materials, ConsERV assists building and home-owners to increase ventilation thereby improving indoor air quality while often saving energy, lowering CO 2 emissions, and allowing for smaller HVAC systems to be installed through the management of moisture and temperature content in the air. Several applications that use the Aqualyte TM platform are under development. These potential applications include: œ NanoAir TM, a water based packaged HVAC system that is potentially capable of achieving improvements in energy efficiency over traditional AC and refrigeration systems, œ NanoClear TM, a water clean-up process that has been demonstrated to provide parts per billion potable water from most forms of contaminated water, including salt, brackish or wastewater 1 , and œ NanoCap TM, an energy storage device (ultracapacitor) we are currently researching and developing that uses the attributes of the Aqualyte TM material to potentially provide significantly greater energy density and power than conventional capacitors or batteries. We are a New York corporation established on April 8, 1993 as Dais Corporation. We subsequently changed our name to Dais Analytic Corporation on December 13, 1999. Our principal executive offices are located at 11552 Prosperous Drive, Odessa, FL 33556. Our telephone number is (727) 375-8484. Our website can be accessed at www.daisanalytic.com and www.conserv.com.
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