Increasive Ventures also gets five-year warrant for 1.5 million shares
By Marisa Wong
Morgantown, W.Va., Aug. 26 – EFactor Group Corp. issued a $1.25 million promissory note to Increasive Ventures BV on July 31, according to an 8-K filing with the Securities and Exchange Commission.
The amount represents a purchase price of $1 million and an original issue discount of $250,000.
The purchase price is payable in two tranches: $500,000 at closing and $500,000 within five business days of certain conditions being met, including discussions between the company and the lender regarding business strategies.
EFactor also issued to Increasive Ventures a five-year warrant to purchase 1.5 million shares of common stock at an exercise price of $4.80 per share. The strike price reflects a 36% discount to the July 17 closing share price of $7.50.
The note accrues interest at a rate of 12% per year on the amount equal to the principal amount less the amount of the second tranche, as long as it has not been made available to the company.
The note matures on Dec. 31, 2015.
Prior to the maturity date, Increasive Ventures may convert the unpaid amount under the loan into shares of EFactor common stock at a conversion price of $4.80 per share.
If the company fails to repay the note at maturity, the lender can redeem the note at a redemption price of 135% of the principal amount then outstanding. At the lender’s option, the redemption can be made either in cash or in restricted shares of the company’s common stock at 50% of the closing share price on the maturity date.
EFactor provides tools and business services to entrepreneurs. The company is based in New York.
| Issuer: | EFactor Group Corp.
|
| Issue: | Convertible promissory note
|
| Amount: | $1.25 million
|
| Maturity: | Dec. 31, 2015
|
| Coupon: | 12%
|
| Price: | $1 million
|
| Conversion price: | $4.80
|
| Warrants: | For 1.5 million common shares
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $4.80
|
| Investor: | Increasive Ventures BV
|
| Pricing date: | July 19
|
| Settlement date: | July 31
|
| Stock symbol: | OTCQB: EFCT
|
| Stock price: | $4.00 at close Aug. 25
|
| Market capitalization: | $13.16 million
|
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