Parties negotiate $1.5 million credit line as well as $2 million note
By Devika Patel
Knoxville, Tenn., Dec. 1 - ImageWare Systems, Inc. amended the terms of an agreement with shareholder Neal Goldman on Nov. 24, according to an 8-K filed Wednesday with the Securities and Exchange Commission. The company will receive $3.5 million from Goldman, in an offering that was first announced on Oct. 8.
Goldman will purchase a $2 million two year 6% unsecured convertible note, which is convertible into common shares at $0.50 per share.
The investor received warrants for 5 million shares, which are exercisable at $0.50. When the note was first announced, the company reported that Goldman would only receive 1 million shares, but the number has since been increased.
Goldman also will provide the company with a $1.5 million line of credit on the same terms as the convertible note by Dec. 28. Any funds drawn on the line will be used toward the final payment on the secured promissory note held by BET Funding LLC, which is due Dec. 30, 2010.
The company will convert Goldman's convertible notes and the line of credit to fully secured from unsecured once it pays off the BET Funding note. In addition, Goldman may appoint up to two members on the company's board of directors.
The strike price of the convertible note and conversion price of the line of credit reflect a 42.86% premium to $0.35, the Oct. 7 closing share price.
San Diego-based ImageWare provides software-based identity management services.
| Issuer: | ImageWare Systems, Inc.
|
| Issue: | Convertible unsecured notes, line of credit
|
| Amount: | $3.5 million
|
| Maturity: | Two years
|
| Coupon: | 6%
|
| Price: | Par
|
| Yield: | 6%
|
| Conversion price: | $0.50
|
| Warrants: | For 5 million shares
|
| Warrant strike price: | $0.50
|
| Investor: | Neal Goldman
|
| Announcement date: | Oct. 8
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| Stock symbol: | Pink Sheets: IWSY
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| Stock price: | $0.42 at close Oct. 8
|
| Market capitalization: | $11.62 million
|
|
|
| Convertibles
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| Amount: | $2 million
|
| Settlement date: | Nov. 24
|
|
|
| Line of credit
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| Amount: | $1.5 million
|
| Warrants: | No
|
| Pricing date: | Nov. 24
|
| Settlement date: | Dec. 28
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