Company receives $75,000 of proceeds in cash, rest in promissory notes
By Angela McDaniels
Tacoma, Wash., July 14 – rVue Holdings, Inc. issued a $252,500 convertible promissory note to Typenex Co-Investment, LLC on July 8. The note has a term of 17 months, an interest rate of 10% per year and an original issue discount of $22,500.
According to an 8-K filing with the Securities and Exchange Commission, the net proceeds to the company were $225,000 in the form of
• An initial tranche of $75,000 in cash (gross proceeds of $87,500 less $7,500 of original issue discount and $5,000 of expense reimbursements); and
• Three promissory notes of $55,000 each (each consisting of $55,000 of gross proceeds, less $5,000 of original issue discount). Typenex may elect, in its sole discretion, to fund one or more of these three notes.
Beginning six months after the closing date, the company is required to pay to Typenex monthly installments of principal equal to $21,041.67 (or such lesser principal amount is then outstanding) plus accrued interest.
Typenex may convert the balance of the Typenex note, or any installment or portion of the note, beginning six months after the closing date. The conversion price is the lower of $0.08 per share and the market price, which is a 30% discount to the average of the three lowest closing bid prices during the 20 trading days immediately preceding conversion.
The company or Typenex may elect to convert any installment into stock at the conversion price.
The Typenex note contains customary adjustments to the conversion price. In addition, except for securities issued under an approved stock plan, if the company sells or issues any common stock or other convertible securities for a price per share that is less than the conversion price, then that lower price will apply to all subsequent conversions by Typenex.
Finally, as long as the Typenex note is outstanding, if any future financing contains more investor-favorable terms, those terms will apply to the company’s financing arrangement with Typenex as well.
The company has the right to prepay the Typenex note under certain circumstances, generally subject to the payment of a 25% prepayment penalty.
The financing is meant to provide for the company’s short-term liquidity needs and to finance its operations pending raising additional capital from other sources.
The Elmhurst, Ill.-based advertising technology company operates rVue, a demand-side platform for planning, buying and managing digital place-based media networks.
| Issuer: | rVue Holdings, Inc.
|
| Issue: | Convertible promissory note
|
| Amount: | $252,500
|
| Net proceeds: | $225,000
|
| Tenor: | 17 months
|
| Coupon: | 10%
|
| Conversion price: | Lower of $0.08 per share and 30% discount to average of three lowest closing bid prices during 20 trading days immediately preceding conversion
|
| Call option: | At 125
|
| Warrants: | No
|
| Investor: | Typenex Co-Investment, LLC
|
| Pricing date: | July 7
|
| Settlement date: | July 8
|
| Stock symbol: | OTCBB: RVUE
|
| Stock price: | $0.045 at close July 7
|
| Market capitalization: | $6.37 million
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
