One-year notes initially convert at $0.17 per share; warrants included
By Devika Patel
Knoxville, Tenn., March 5 - Fuse Science, Inc. negotiated a $1.5 million private placement of 5% senior convertible notes and a $550,000 placement of 5% senior subordinated convertible notes on March 4, according to an 8-K filed Thursday with the Securities and Exchange Commission. The deal will settle March 6.
The one-year notes initially convert to common stock at $0.17 per share. The conversion price is a 22.73% discount to the March 1 closing share price of $0.22. The company may force conversion under certain conditions.
The investors also received series A warrants for 11,764,705 shares and series B warrants for 11,764,705 shares. The series A warrants are exercisable at $0.21 for five years. The series B warrants are exercisable at $0.17 for seven months. The strike prices are 4.55% and 22.73% discounts to the March 1 closing share price.
The Tulsa, Okla., company has developed the rights to sublingual and transdermal delivery systems for bioactive agents that can encapsulate and charge many varying molecules in order to produce complete product formulations, which can bypass the gastrointestinal tract and enter the blood stream directly.
| Issuer: | Fuse Science, Inc.
|
| Issue: | Senior convertible notes, senior subordinated convertible notes
|
| Amount: | $2.05 million
|
| Maturity: | One year
|
| Coupon: | 5%
|
| Conversion price: | $0.17
|
| Call: | Yes
|
| Warrants: | For 23,529,410 shares
|
| Warrant expiration: | Five years (series A), seven months (series B)
|
| Warrant strike price: | $0.21, $0.17
|
| Pricing date: | March 4
|
| Settlement date: | March 6
|
| Stock symbol: | OTCBB: DROP
|
| Stock price: | $0.22 at close March 1
|
| Market capitalization: | $38.06 million
|
|
|
| Senior convertible notes
|
| Amount: | $1.5 million
|
|
|
| Senior subordinated convertible notes
|
| Amount: | $550,000
|
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