Crown Electrokinetics gets line of credit for up to $100 million

By Mary-Katherine Stinson

Lexington, Ky., Feb. 3 – Crown Electrokinetics Corp. closed on a secured line of credit on Feb. 2 for up to $100 million to fund expenses related to contract fulfilments for customers of its wholly-owned subsidiary Crown Fiber Optics Corp., according to a press release and an 8-K filing with the Securities and Exchange Commission.

Simultaneously with entering the line of credit, Crown drew $2 million under the agreement.

Loans made under the line of credit are evidenced by a secured promissory note issued by the company to the lender. It is due and payable 60 days after such loan is funded. The promissory note does not bear interest.

The lender received a security interest in the company’s collateral.

The promissory note evidencing the initial $2 million advance is convertible into shares of the company’s common stock at a conversion price per share of $0.50 subject to adjustment under certain circumstances.

Promissory notes evidencing future advances, if any, can only be converted into common stock upon declaration of a default event.

The lender will consider requests for further line of credit advances until Feb. 2, 2024 unless the agreement is extended for one to two years according to its terms.

The company also agreed to issue to the lender 5,000 shares of the company’s newly-created series E preferred stock and issue a warrant exercisable for five years to purchase 45,000 shares of the company’s series E preferred stock at an exercise price of the greater of $0.50 or the Nasdaq closing price as of the trading day immediately prior to issuance of the warrant in either case multiplied by 1,000 and subject to adjustment under certain circumstances. An additional 5,000 shares will be issued on the first and second anniversaries of the date of the line of credit if the company elects not to extend the line of credit by one to two years.

Crown is a Corvallis, Ore.-based smart glass technology company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.