Deal is comprised of five-year warrants and one-year promissory notes
By Devika Patel
Knoxville, Tenn., June 13 - Rackwise, Inc. settled a $1.73 million initial tranche of a $5 million private placement of units on June 11, according to an 8-K filed Thursday with the Securities and Exchange Commission.
The company is selling units of $10,000 principal amount of one-year secured convertible promissory notes and 80,000 five-year warrants.
The notes are convertible into common stock at the lesser of $0.05 and 80% of the five-day value-weighted average price of the stock for the five trading days preceding the conversion date.
The warrants are each exercisable at $0.01. The strike price is a 50% discount to the June 10 closing share price of $0.02.
Navesink RACK, LLC and Black Diamond Financial Group LLC are among the investors.
San Francisco-based Rackwise produces software.
| Issuer: | Rackwise, Inc.
|
| Issue: | Units of $10,000 of secured convertible promissory notes and 80,000 warrants
|
| Amount: | $5 million
|
| Note maturity: | One year
|
| Note conversion price: | Lesser of $0.05 and 80% of the five-day value-weighted average price of the stock for the five trading days preceding the conversion date
|
| Note call option: | Yes
|
| Warrants: | 80,000 warrants per unit
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.01
|
| Investors: | Navesink RACK, LLC and Black Diamond Financial Group LLC
|
| Pricing date: | June 11 (for $1,726,335)
|
| Stock symbol: | OTCBB: RACK
|
| Stock price: | $0.02 at close June 10
|
| Market capitalization: | $2.24 million
|
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