Senior promissory note will convert to units of one share, one warrant
By Devika Patel
Knoxville, Tenn., Nov. 13 - Rackwise, Inc. negotiated a $5.5 million private placement of 6% series A senior secured convertible promissory notes with Black Diamond Financial Group, LLC on Nov. 9, according to an 8-K filed Tuesday with the Securities and Exchange Commission. The purchase price of the notes will be 91, and the investor may invest another $5 million.
The deal will settle in multiple tranches.
The notes mature in three days and are convertible into units at $0.20 per unit. Each unit consists of one common share and one warrant, with each warrant exercisable at $0.30 for five years.
The conversion price reflects a 33.33% premium to the Nov. 8 closing share price of $0.15. The warrant strike price is a 100% premium to that price.
The company will settle a $750,000 tranche on Dec. 1. An additional $750,000 of notes will be sold in four tranches each on Dec. 15, Jan. 15, Feb. 15 and March 15. A final $1.75 million note will be sold on April 15
San Francisco-based Rackwise produces software.
| Issuer: | Rackwise, Inc.
|
| Issue: | Series A senior secured convertible promissory notes
|
| Amount: | $5.5 million
|
| Maturity: | Three years
|
| Coupon: | 6%
|
| Price: | 91
|
| Conversion price: | $0.20
|
| Warrants: | One warrant per unit upon conversion
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.30
|
| Investor: | Black Diamond Financial Group, LLC
|
| Pricing date: | Nov. 9
|
| Settlement date: | Dec. 1 (for $750,000), Dec. 15 (for $750,000), Jan. 15 (for $750,000), Feb. 15 (for $750,000), March 15 (for $750,000), April 15 (for $1.75 million)
|
| Stock symbol: | OTCBB: RACK
|
| Stock price: | $0.15 at close Nov. 8
|
| Market capitalization: | $14.89 million
|
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