Proceeds slated for $15 million debt repayment, working capital
By Susanna Moon
Chicago, Oct. 29 – Viggle Inc. said it entered into a securities purchase agreement with the Sillerman Investment Co., a company owned by the company’s chief executive officer Robert F.X. Sillerman, for a $30 million investment.
Proceeds will be used to repay $15 million of debt and for working capital purposes, including marketing and to fuel innovation for its marketing and rewards platform.
Under the purchase agreement, SIC III agreed to purchase securities issued by the company for a total of $30 million, consisting of a $20 million line of credit and the $10 million of series C convertible preferred stock, according to a company press release.
The preferreds will be convertible into shares at $4.00 per share, which is a 38.89% premium to the company’s closing price on Oct. 28.
The company also agreed to issue to SIC III warrants for 1.5 million shares, as amounts are funded under the line of credit and for the preferred stock, the company said.
The warrant exercise price will be 10% above the closing price of the company’s shares on the date prior to the issuance of the warrants.
“This financing is a milestone for Viggle, as it will further drive our initiative to become one of the largest and leading marketing and rewards platforms,” Greg Consiglio, president and chief operating officer of Viggle, said in the press release.
The entertainment company is based in New York.
| Issuer: | Viggle Inc.
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| Issue: | Line of credit, series C convertible preferred stock
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| Amount: | $30 million
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| Warrants: | For 1.5 million shares
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| Warrant exercise price: | 10% above stock price on the date prior to issue
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| Announcement date: | Oct. 29
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| Stock symbol: | Nasdaq: VGGL
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| Stock price: | $2.88 at close Oct. 28
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| Market capitalization: | $44.86 million
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| Line of Credit
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| Amount: | $20 million
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| Series C convertible preferred stock
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| Amount: | $10 million
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| Conversion price: | $4.00
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| Conversion premium: | 38.89%
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