By Sheri Kasprzak
New York, July 22 - ROO Group, Inc. said it has completed a private placement of callable secured convertible notes for $2.5 million.
AJW Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC and New Millennium Capital Partners II, LLC bought the notes and received warrants for 5 million shares.
The three-year notes bear interest at 8% annually and are convertible into common shares at the lower of $0.10 each or 50% of the average of the three lowest intraday trading prices for 20 trading days before the conversion date.
The conversion price may be adjusted if the company issues shares at a price below $0.10.
The notes may be prepaid at 125% of principal plus interest within 30 days of issue, at 135% of principal plus interest between 31 and 60 days of issuance and at 150% of principal plus interest more than 60 days after issuance.
If the company's stock trades below $0.10 every day in a month after the notes are issued, the company may prepay a portion of the notes at a price equal to 104% of the principal divided by 36 plus one month's interest.
So far, ROO has received $550,000 from the offering and will receive $177,273 on the last business day of each month beginning in August and ending June 2006. The entire $2.5 million must be funded within five business days of a registration statement being declared effective.
The warrants for 5 million shares are exercisable at $0.20 each for five years.
Based in New York, ROO creates streaming video and other content for the internet.
| Issuer: | ROO Group, Inc.
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| Issue: | Callable secured convertible notes
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| Amount: | $2.5 million
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| Maturity: | Three years
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| Coupon: | 8%
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| Price: | Par
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| Yield: | 8%
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| Conversion price: | The lesser of $0.10 each or 50% of the average of the three lowest intraday trading prices for 20 trading days before the conversion date
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| Call: | May be prepaid at 125% of principal within 30 days, 135% of principal 31 to 60 days after issuance and at 150% of principal more than 60 days after issuance
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| Warrants: | For 5 million shares
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| Warrant expiration: | Five years
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| Warrant strike price: | $0.20
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| Investors: | AJW Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC, New Millennium Capital Partners II, LLC
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| Settlement date: | July 18
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| Stock price: | $0.017 at close July 18
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