Company plans to raise $4 million more through subsequent offering
By Angela McDaniels
Tacoma, Wash., July 6 - Rackwise, Inc. completed a private placement on June 29. It sold 500 of bridge units to one investor for $500,000.
The price is $1,000 per bridge unit. Each bridge unit consists of an 8% convertible promissory note due 12 months after issuance and one warrant.
Gottbetter Capital Markets, LLC acted as agent, according to an 8-K filing with the Securities and Exchange Commission.
In addition to the offering, the company plans to raise at least $4 million through a subsequent offering of equity or convertible securities.
If a subsequent offering occurs, the promissory notes will be automatically convertible into the units sold in the subsequent offering. The conversion price will be 65% of the subsequent offering price, and subsequent offering price means the price per share of common stock, or the conversion price of any security convertible into common stock, of the company comprising or included in the units it sells in the subsequent offering.
If a subsequent offering does not occur, the notes will be convertible into common stock. The conversion price per share will be 65% of the 20-day volume-weighted average price immediately preceding the maturity date.
Each three-year warrant is exercisable for one share of common stock. The initial exercise price is the average of the daily volume-weighted average prices of the common stock for the 20 consecutive trading days immediately preceding the date of exercise.
If a subsequent offering occurs, the warrant exercise price is subject to an adjustment to 150% of the subsequent offering price.
The warrants will be exercisable on a cashless basis any time after one year.
The company plans to use the proceeds for general working capital.
Rackwise is a San Francisco-based software development, sales and marketing company.
| Issuer: | Rackwise, Inc.
|
| Issue: | Bridge units of one convertible promissory note and one warrant
|
| Amount: | $500,000
|
| Units: | 500
|
| Price: | $1,000
|
| Note coupon: | 8%
|
| Note maturity: | 12 months
|
| Note conversion price: | 65% of subsequent offering price or, if subsequent offering does not occur, 65% of 20-day volume-weighted average price of common stock immediately preceding maturity date
|
| Warrants: | One per unit
|
| Warrant expiration: | Three years
|
| Warrant strike price: | Average of daily volume-weighted average prices of common stock for 20 consecutive trading days immediately preceding exercise date
|
| Agent: | Gottbetter Capital Markets, LLC
|
| Settlement date: | June 29
|
| Stock symbol: | OTCBB: RACK
|
| Stock price: | $0.195 at close July 6
|
| Market capitalization: | $19.35 million
|
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