Secured notes initially convert at $0.02 per share; warrants included
By Devika Patel
Knoxville, Tenn., Jan. 3 - Fuse Science, Inc. arranged a $1 million private placement of 12% senior secured convertible notes on Jan. 3, according to an 8-K filed Friday with the Securities and Exchange Commission.
The five-year notes initially convert to common stock at $0.02 in the first six months and after that at a conversion price equal to the lower of $0.02 and 60% of the average of the lowest weighted average price of the stock for the 60 trading days preceding conversion. The initial conversion price is a 33.33% discount to the Jan. 2 closing share price of $0.03.
The investors also will receive warrants for 50 million shares, which are each exercisable at $0.0259 for seven years. The strike price is a 13.67% discount to the Jan. 2 closing share price.
Settlement of the initial $550,000 tranche is expected Jan. 6. The first tranche will include warrants for 41.25 million shares.
The balance of $450,000 will be settle in five tranches, with the first four tranches each consisting of $100,000 of notes and warrants for 7.5 million shares and the fifth and final tranche consisting of $50,000 of notes and warrants for 3.75 million shares.
The Miami Lake, Fla., 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 bloodstream directly.
| Issuer: | Fuse Science, Inc.
|
| Issue: | Senior secured convertible notes
|
| Amount: | $1 million
|
| Maturity: | Five years
|
| Coupon: | 12%
|
| Conversion price: | $0.02 in the first six months, then at a conversion price equal to the lower of $0.02 and 60% of the average of the lowest weighted average price of the stock for the 60 trading days preceding conversion
|
| Warrants: | For 50 million shares
|
| Warrant expiration: | Seven years
|
| Warrant strike price: | $0.0259
|
| Pricing date: | Jan. 3
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| Settlement date: | Jan. 6 (for $550,000)
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| Stock symbol: | OTCBB: DROP
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| Stock price: | $0.03 at close Jan. 2
|
| Market capitalization: | $6.16 million
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