Dataram inks swap agreement for series A preferreds, warrants, notes

Securities exchanged for 335,684 0% series B convertible preferreds

By Devika Patel

Knoxville, Tenn., Jan. 21 – Dataram Corp. negotiated an exchange agreement for the series A preferred stock, subordinated secured convertible bridge notes and warrants that were issued in financings on Sept. 18, 2013, July 15, 2014, Nov. 17, 2014, Feb. 2, 2015 and Oct. 30, according to an 8-K filed Thursday with the Securities and Exchange Commission. The exchange was executed on Jan. 15.

The company issued 335,684 0% series B convertible preferred shares in exchange for the securities.

The series B preferreds are convertible into common stock at $0.61 per share. Each series B preferred is valued at $12.20 and converts at a ratio of one preferred to 20 common shares. There are no dividends.

The preferred holders have agreed to exchange each series A preferred held for 0.41 series B preferreds.

The bridge note holders have agreed to exchange the $680,000 8% secured notes issued on July 14, 2014 at an exchange rate of one series B preferred for every $12.20 of principal and interest.

The warrant holders have agreed to exchange all warrants at an exchange rate of one series B preferred for every 40 common shares into which the exchanged warrants are exercisable.

The exchange increases the company's total outstanding common shares and common stock equivalents from 11.2 million shares to 12.2 million shares, eliminates about $680,000 of 8% notes and interest liability and eliminates the 8% dividend on the series A preferreds.

“The exchanges provide an opportunity for Dataram to relieve substantially all of its outstanding institutional debt and eliminate the dilutive preferred series A dividend," Dataram's chairman and chief executive officer Dave Moylan said in a press release. “Under these exchanges, we will settle the approximate $680,000 in balances of the institutional notes and accrued interest and exchange the notes into preferred series B shares of the company.”

The company has also changed its state of incorporation from New Jersey to Nevada.

Dataram is a West Windsor, N.J., developer, manufacturer and marketer of large-capacity memory products primarily used in high-performance network servers and workstations.

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