By Sheri Kasprzak
New York, July 10 - Innofone.com, Inc. completed a private placement of series A convertible preferred stock and common shares for $50 million and effected an equity swap with investors Cogent Capital Investments LLC and Cogent Capital Financial LLC.
Cogent Capital and Cogent Capital Financial received 1.85 million common shares and 4,815,000 preferreds in the placement.
Each preferred is convertible into 10 common shares.
Under the swap agreement, the U.S. Treasury notes and strips with a value of at least $50 million received in exchange for the preferreds and common stock are put into escrow. Once a registration for the stock is effective, they are released over 30 months as Innofone makes period payments on the swap, which are based on a reference price of $1.333333 per share.
Innofone may terminate the agreement by redeeming all of the series A preferreds two years after issuance.
As part of the swap, Innofone paid an initial exchange amount of $1,375,000 in cash and issued 5 million common shares and warrants for 5 million shares. The warrants are exercisable at $1.20 each for five years.
Proceeds from the transaction will be used for working capital.
Based in Santa Monica, Calif., Innofone.com provides wireless and internet-based telecommunications products.
| Issuer: | Innofone.com, Inc.
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| Issue: | Common stock, series A convertible preferred stock
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| Amount: | $50 million
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| Shares: | 1.85 million common shares and 4,815,000 series A preferreds
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| Conversion ratio: | Each preferred into 10 common shares
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| Warrants: | No
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| Investors: | Cogent Capital Investments LLC and Cogent Capital Financial LLC
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| Settlement date: | June 5
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| Stock symbol: | OTCBB: INFN
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| Stock price: | $0.72 at close June 5
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