Deal offers 8%, 12% notes in tranches with variable conversion prices
By Devika Patel
Knoxville, Tenn., Aug. 11 – Vape Holdings, Inc. settled a private placement of convertible notes on Aug. 5, according to an 8-K filed Tuesday with the Securities and Exchange Commission.
The company sold $280,000 of 8% unsecured convertible redeemable notes; $280,000 of 8% convertible redeemable back end notes; a $400,000 12% convertible note, with $125,000 funded at closing on Aug. 5, minus a 10% original issue discount; and a $112,000 12% convertible note.
The 8% notes are convertible into common stock at a conversion price equal to 58% of the average of the lowest trading price of the stock during the 13 trading days preceding the conversion date. The company may prepay the one-year 8% notes in the first 180 days at 148.
The first two-year 12% note is convertible into stock at a conversion price equal to the lesser of $0.34 or 60% of the lowest trade price of the stock in the 20 trading days preceding conversion. The company may prepay the first 12% note in the first 90 days without penalty.
The second seven-month 12% note is convertible into stock at a conversion price equal to 55% of the lowest trading price of the stock during the 15 trading days preceding a conversion notice. It may be prepaid at prices ranging from 140 to 150.
The Chatsworth, Calif., company develops technology that would allow social network users to earn incentives.
| Issuer: | Vape Holdings, Inc.
|
| Issue: | Unsecured convertible redeemable notes, convertible redeemable back end notes, convertible notes
|
| Amount: | $1,072,000
|
| Warrants: | No
|
| Settlement date: | Aug. 5
|
| Stock symbol: | OTCBB: VAPE
|
| Stock price: | $0.27 at close Aug. 4
|
| Market capitalization: | $3.76 million
|
|
|
| First note
|
| Amount: | $280,000
|
| Maturity: | One year
|
| Coupon: | 8%
|
| Conversion price: | 58% of the average of the lowest trading price of the stock during the 13 trading days preceding the conversion date
|
| Call: | At 148
|
|
|
| Second note
|
| Amount: | $280,000
|
| Maturity: | One year
|
| Coupon: | 8%
|
| Conversion price: | 58% of the average of the lowest trading price of the stock during the 13 trading days preceding the conversion date
|
| Call: | At 148
|
|
|
| Third note
|
| Amount: | $400,000
|
| Maturity: | Two years
|
| Price: | 10% original issue discount
|
| Coupon: | 12%
|
| Conversion price: | The lesser of $0.34 or 60% of the lowest trade price of the stock in the 20 trading days preceding conversion
|
| Call: | At par in the first 90 days
|
| Settlement date: | Aug. 5 (for $125,000)
|
|
|
| Fourth note
|
| Amount: | $112,000
|
| Maturity: | Seven months
|
| Coupon: | 12%
|
| Conversion price: | 55% of the lowest trading price of the stock during the 15 trading days preceding a conversion notice
|
| Call: | At prices ranging from 140 to 150
|
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