Convertibles to be sold in three tranches; first part closed Monday
By Susanna Moon
Chicago, Aug. 26 – Medbox, Inc. arranged a $1.5 million private placement of 5% 12-month convertible debentures in three tranches, according to an 8-K filed Wednesday with the Securities and Exchange Commission. The initial tranche for $400,000 closed Aug. 24.
The second tranche for $400,000 will close within two days after the filing of a form S-1 registration statement and the third tranche for $700,000 will close within two days of the effective date of the registration statement.
The debentures are convertible at any time, in whole or in part, at a conversion price that is the lower of $0.75 and a 49% discount to the lowest daily volume-weighted average price of the company’s common stock during the 30 trading days prior to the conversion date.
The company may prepay the debentures in cash, prompting a 30% premium, the filing noted.
The deal also includes a warrant instrument granting the investor the right to purchase shares of common stock equal to the principal amount of the debenture divided by a price (the “reference price”) equal to 120% of the last reported closing price of the company’s common stock on the closing date of the debenture, at an exercise price equal to the reference price, with a three-year term.
The investor also has a right of first refusal to participate in future equity financings of the company on the same terms as any new investors for 12 months from the closing of the last debenture issued under the purchase agreement.
The West Hollywood, Calif., company offers a machine that dispenses medication to individuals based on biometric identification.
| Issuer: | Medbox, Inc.
|
| Issue: | Convertible debentures
|
| Amount: | $1.5 million
|
| Maturity: | 12 months
|
| Coupon: | 5%
|
| Conversion price: | Lower of $0.75 and a 49% discount to the lowest daily volume-weighted average price of the company’s common stock during the 30 trading days prior to the conversion date
|
| Warrant: | For number of shares equal to principal amount of debentures divided by reference price
|
| Reference price: | 120% of the last reported closing price of the company’s common stock on the closing date of the debenture
|
| Warrant expiration: | Three years
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| Warrant strike price: | Equal to reference price
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| Pricing date: | Aug. 20
|
| Stock symbol: | OTCBB: MDBX
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| Stock price: | $0.08 at close Aug. 25
|
| Market capitalization: | $10.4 million
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