YA global to buy shares in tranches at 4% discount to market
By Toni Weeks
San Diego, May 15 - FreeSeas Inc. entered into a standby equity distribution agreement on May 11 with YA Global Master SPV Ltd., according to a 6-K filing with the Securities and Exchange Commission.
Under the agreement, the company will sell up to $3.2 million of common stock in tranches over the course of 24 months at a price that is 96% of the lowest daily volume-weighted average price during the pricing period, which is the five consecutive trading days after the company delivers an advance notice to YA Global.
Each advance may not exceed the greater of $200,000 or 100% of the average daily trading volume of the company's common stock for the 10 consecutive trading days prior to the notice date.
Yorkville Advisors, LLC, YA Global's manager, received $15,000 as a structuring fee, and YA Global was issued 100,000 shares as a commitment fee. The company will owe YA Global another $50,000 if FreeSeas does not terminate the agreement as of the one-year anniversary.
FreeSeas will use the proceeds for general corporate purposes.
According to the filing, YA Global will also provide the company with a $500,000 loan at 8% interest to be repaid in 10 equal weekly installments. The loan is pre-payable at par plus interest and a 2% pre-payment fee.
FreeSeas Inc., based in Athens, is a transporter of dry-bulk cargoes.
| Issuer: | FreeSeas Inc.
|
| Issue: | Standby equity distribution agreement
|
| Amount: | $3.2 million
|
| Price: | 96% of lowest daily volume-weighted average price during five consecutive trading days after company delivers notice
|
| Tenor: | 24 months
|
| Warrants: | No
|
| Investor: | YA Global Master SPV Ltd.
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| Pricing date: | May 11
|
| Stock symbol: | Nasdaq: FREE
|
| Stock price: | $0.82 at close May 11
|
| Market capitalization: | $5 million
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