Discounted 5% notes sold with 1.35 million warrants, 750,000 shares
By Devika Patel
Knoxville, Tenn., Aug. 3 – Innovus Pharmaceuticals, Inc. raised $500,000 in the initial tranche of a $1.5 million private placement of convertible promissory notes on Aug. 3, according to an 8-K filed Monday with the Securities and Exchange Commission. The deal priced on July 15 and July 28.
The $550,000 of notes was sold at a 10% original issue discount and were accompanied by 750,000 common shares and warrant coverage.
The 5% notes are due on Aug. 15, 2016 and Aug. 28, 2016. They convert to common stock at $0.30 per share. The conversion price is an 87.5% premium to $0.16, the July 14 closing share price. The notes may be prepaid at 115.
The investors also will receive warrants for 1.35 million shares, with warrants for 500,000 shares issued in the first tranches. Each five-year warrant is exercisable at $0.30, also an 87.5% premium to the July 14 closing share price.
Proceeds will be used for general working capital purposes.
“We are very excited about the new capital which will support product manufacturing to fulfill the current orders received from our partners for our products around the world,” president and chief executive officer Bassam Damaj said in a press release. “Our ability to interest institutional funds is a big step for the company. In addition, as previously disclosed, the company had signed commercial agreement with $2 million in minimum orders and with the new funding we will be able to scale up our manufacturing and move to our next phase of growth and revenue generation.”
The pharmaceutical company is based in Sierra Madre, Calif.
| Issuer: | Innovus Pharmaceuticals, Inc.
|
| Issue: | Convertible promissory notes, 750,000 common shares
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| Amount: | $1.5 million
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| Maturity: | Aug. 15, 2016, Aug. 28, 2016
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| Price: | 10% original issue discount ($1.35 million)
|
| Coupon: | 5%
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| Conversion premium: | 87.5%
|
| Conversion price: | $0.30
|
| Call: | At 115
|
| Warrants: | For 1.35 million shares
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| Warrant expiration: | Five years
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| Warrant strike price: | $0.30
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| Investors: | Vista Capital Investments, LLC and Lynnette Dillen
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| Pricing dates: | July 15 and July 28
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| Settlement date: | Aug. 3 (for $500,000)
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| Stock symbol: | OTCBB: INNV
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| Stock price: | $0.16 at close July 14
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| Market capitalization: | $6.24 million
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