7 Reasons Why Glu Wants Shareholders To Approve Their $13.5mil Private Placement

This is from a Schedule 14A filed with the SEC on Friday July 23rd. I've highlighted some key points.

1. the fact that the proceeds from the Proposed Issuance will enable us to advance our new strategic direction and the development of persistent-state, freemium products;
2. our financial condition, results of operations, cash flow and liquidity, including our outstanding debt obligations, which required us to raise additional capital for ongoing cash needs;
3. our view that the proceeds from the Proposed Issuance will enhance our balance sheet;
4. current and projected challenging economic and market conditions, and general uncertainty surrounding forecasted economic conditions globally as well as within the mobile gaming industry;
5. the fact that the Proposed Issuance represented the best of several financing and other strategic transaction alternatives resulting from the extensive process undertaken by the Special Committee, with the assistance of our management and our advisors, in soliciting third party indications of interest in both a financing transaction and a potential sale of the Assets;
6. the fact that each of our stockholders who hold at least 300,000 shares, or approximately 1% of our outstanding shares of common stock, was given the opportunity to participate in the Private Placement; and
7. the fact that our stockholders would have an opportunity to approve the Proposed Issuance.

Some key adverse factors to the issuance that the company's board considered were...

• the fact that our stockholders who did not participate in the Private Placement will be diluted and the value of our common stock could be diluted;
• the fact that the ownership by the Investors of a substantial percentage of our total voting power may make it more difficult and expensive for a third party to pursue a change of control of our company;
• the fees and expenses to be incurred by us in connection with the Proposed Issuance; and
• the fact that the covenant in the Proposed Issuance prohibiting “variable rate transactions,” as described in further detail in the section entitled “Terms of the Proposed Issuance — Summary of the Terms of the Purchase Agreement” below, may limit our financing flexibility in the future.