Investor also receives three-year warrants for 500,000 common shares
By Angela McDaniels
Tacoma, Wash., March 15 – Major League Football, Inc. sold a 10% one-year convertible promissory note to SBI Investments LLC on March 9. The note has a principal amount of $550,000 and sold for $445,000.
The conversion price is 70% of the average of the lowest three volume-weighted average prices of the company’s common stock during the 20 trading days preceding conversion, according to an 8-K filing with the Securities and Exchange Commission.
The company agreed to reserve five times the number of shares that is actually issuable upon full conversion of the note.
The note may be repaid in whole at any time. The repayment amount is $605,000 if the note is repaid within 30 days of the original issue date, $632,500 if repaid 31 to 60 days after the original issue date, $660,000 if repaid 61 to 90 days after the original issue date and $687,500 if repaid 91 to 120 days after the original issue date.
The investor received three-year warrants to purchase 250,000 shares of the company’s common stock at an exercise price of $1.02 and 250,000 shares at an exercise price of $1.19. The exercise prices are a 20% premium and a 40% premium, respectively, to the company’s closing share price on March 8.
Also, Michael Queen, a company director and executive officer, executed an insider pledge agreement to secure the obligations of the company under the note and the purchase agreement with SBI.
Major League Football is working to establish a professional spring football league. It is based in Lakewood Ranch, Fla.
| Issuer: | Major League Football, Inc.
|
| Issue: | Convertible promissory note
|
| Amount: | $550,000
|
| Price: | $445,000
|
| Maturity: | March 9, 2017
|
| Coupon: | 10%
|
| Conversion price: | 70% of the average of the lowest three volume-weighted average prices of the stock during the 20 trading days preceding conversion
|
| Warrants: | For 500,000 shares
|
| Warrant expiration: | Three years
|
| Warrant strike price: | $1.02 for 250,000 shares and $1.19 for 250,000 shares
|
| Investor: | SBI Investments LLC
|
| Settlement date: | March 9
|
| Stock symbol: | OTC: MLFB
|
| Stock price: | $0.85 at close March 8
|
| Market capitalization: | $46.91 million
|
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