Two types of notes sold in units with 10-year warrants for four shares
By Devika Patel
Knoxville, Tenn., Jan. 30 – Rainmaker Systems, Inc. settled an $810,000 tranche of a private placement of debt units on Jan. 29, according to an 8-K filed Monday with the Securities and Exchange Commission. Scarsdale Equities, LLC is the agent for the deal, which raised $2.55 million on July 15, 2014.
The company is selling units of a $1.00 secured convertible promissory note, a $0.50 supplemental secured promissory note and warrants for four common shares at $1.00 per unit. It sold 2.55 million units in the July 15 tranche and 810,000 units in the Jan. 29 tranche.
The 8% convertible is due on July 15, 2019 and initially converts to stock at $0.25 per share.
The 8% supplemental note matures on July 15, 2019.
The 10-year warrants are initially exercisable at $0.08, a 42.86% discount to the July 14 closing share price of $0.14. The conversion price is a 78.57% premium to that price.
Proceeds were used to repay debt owed to Comerica Bank and Agility Capital II, LLC, and will also be used to make a cash payment to Symantec and for general corporate purposes, including working capital.
Campbell, Calif.-based Rainmaker Systems provides business-to-business and cloud-based e-commerce services meant to increase online sales and renewal for products, subscriptions and training for enterprises in computer hardware and software, and information services industries.
| Issuer: | Rainmaker Systems, Inc.
|
| Issue: | Units of a $1.00 secured convertible promissory note, a $0.50 supplemental secured promissory note and warrants for four common shares
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| Amount: | $3.36 million
|
| Units: | 3.36 million
|
| Price: | $1.00
|
| Warrants: | Warrants for four shares per unit
|
| Warrant expiration: | 10 years
|
| Warrant strike price: | $1.00
|
| Agent: | Scarsdale Equities, LLC
|
| Settlement dates: | July 15, 2014 (for $2.55 million), Jan. 29, 2015 (for $810,000)
|
| Stock symbol: | OTCBB: RMKR
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| Stock price: | $0.14 at close July 14, 2014
|
| Market capitalization: | $1.39 million
|
|
|
| Convertible notes
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| Amount: | $1.00 per unit
|
| Maturity: | July 15, 2019
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| Coupon: | 8%
|
| Conversion price: | $0.25
|
| Conversion premium: | 78.57%
|
|
|
| Supplemental notes
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| Amount: | $0.50 per unit
|
| Maturity: | July 15, 2019
|
| Coupon: | 8%
|
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