Lock-Up Option

See: 144a.

It’s a big day for us here at Krazy Kazoos, Inc. We’ve been facing a hostile takeover by Big Fat Musical Instruments Company (BFMIC), which was making us very sad...but now it looks like we’ve got another option. Seraphim Music, another big dog in the musical instrument world, is offering to be our shining white knight and protect us from BFMIC’s evil takeover plans. To sweeten the pot, we’re giving them a sweet lock-up option: we’re offering a substantial piece of equity in our company if they’ll just promise to keep BFMIC away.

As indicated, a “lock-up option” is something awesome offered to a white knight in return for their white knight-ness. Our goal is to make our company less attractive to the wannabe acquirer (BFMIC) by relieving ourselves of some of our more enticing assets. Since Seraphim Music is definitely (hopefully) a white knight and not a Lady Macbeth type, we’re fairly confident that they’ll only hold onto that equity until the BFMIC threat has passed…and then we’ll figure out a way to get it back and merrily go on our way.