SMG Indium Resources (SMGI) – Odd Lot Tender Offer – 2.5% upside

Current Price – $2.35

Offer Price – $2.41

Upside – 2.5% or $6 (for odd lot holders)

Expiration date –  1 December 2014

Note - as 78% of stock is being purchased there is a high possibility that the offer will be under-subscribed and therefore there will be no proration at all not only for odd lot holders, meaning that 2.5% upside is likely to be realized by all tendering shareholders.

SEC Filling

Summary:

Upon the terms and subject to the conditions of the Offer, we will purchase Shares up to an aggregate purchase price of $16,094,842.78, or a lower aggregate purchase price depending on the number of Shares properly tendered and not properly withdrawn in accordance with Section 4 before the Expiration Time, at a price equal to $2.41 per Share, net to the seller in cash, less any applicable withholding taxes and without interest. We refer to such purchase price as the Purchase Price. If, based on the Purchase Price, Shares having an aggregate purchase price of less than $16,094,842.78 are properly tendered and not properly withdrawn, we will buy all Shares properly tendered and not properly withdrawn.

At the Purchase Price of $2.41 per Share, we could purchase 6,678,358 Shares if the Offer is fully subscribed, which would represent approximately 78% of the issued and outstanding Shares as of September 30, 2014. As of October 2, 2014, our directors and executive officers as a group (9 persons) beneficially owned an aggregate of 4,252,440 Shares or approximately 50.0% of the total outstanding Shares. Our directors and executive officers are entitled to participate in the Offer on the same basis as all other stockholders. Our directors, executive officers and our affiliates have advised us that they intend to tender all of their Shares in the Offer.

No proration for Odd Lot holders:

For purposes of the Offer, the term “odd lots” means all Shares properly tendered at the Purchase Price held by a stockholder who owns beneficially or of record an aggregate of fewer than 100 Shares, which we refer to as an “odd lot holder,” and so certifies in the appropriate place on the Letter of Transmittal and, if applicable, the Notice of Guaranteed Delivery. To qualify for this preference, an odd lot holder must tender all Shares owned beneficially or of record by the odd lot holder. As set forth above, odd lots will be accepted for payment before proration, if any, of the purchase of other tendered Shares.

Source of Funds:

Assuming that the Offer is fully subscribed, the aggregate purchase price of Shares purchased in the Offer will be $16,094,842.78. We expect that the maximum aggregate cost of these purchases, including all fees and expenses applicable to the Offer, will be approximately $150,000. We plan to fund any purchase of Shares pursuant to the Offer, including the related fees and expenses, using our cash on hand or other cash resources that are readily available to us. The Offer is not conditioned upon the receipt of financing.