By Devika Patel
Knoxville, Tenn., March 17 - Vertical Communications, Inc. negotiated a $5.25 million private placement of short-term subordinated convertible promissory notes.
The notes are due on demand, bear interest at 15% and are automatically convertible into series F preferred stock upon a qualifying investment of $1 million by one of the company's shareholders.
Upon conversion, the notes will have similar terms to the company's previously issued series E preferred stock, along with warrants to purchase common shares. If no qualifying investment is made within 60 days, the notes will automatically convert into series F preferred stock but as subordinated to some of the company's more senior debt.
Located in Cambridge, Mass., Vertical develops hardware and software used in the communications sector.
| Issuer: | Vertical Communications, Inc.
|
| Issue: | Short-term subordinated convertible promissory notes
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| Amount: | $5.25 million
|
| Maturity: | On demand
|
| Coupon: | 15%
|
| Price: | Par
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| Yield: | 15%
|
| Warrants: | Upon conversion
|
| Pricing date: | March 17
|
| Stock symbol: | OTCBB: VRCC
|
| Stock price: | $0.42 at close March 17
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