By Susanna Moon
Chicago, May 26 - CrowdGather, Inc. said it closed a private offering of its 8% secured convertible debentures due November 2010 to a limited number of foreign institutional buyers.
The company will receive cash proceeds of $1,300,000, and $1,075,000 in previously issued short-term promissory obligations were exchanged for the new debentures.
Investors received warrants exercisable at $0.70 per share to purchase up to 1,599,997 common shares. The company's stock closed at $0.70 per share on May 21.
After repayment of current debt obligations, about $1 million will be available for the company's general corporate purposes and working capital. Following the closing, CrowdGather no longer has any short-term debt obligations.
The majority of the debentures are convertible into common stock, at the holder's option, at an initial conversion price of the greater of $0.50 or a 20% discount to the volume-weighted average share price for the 10 days prior to the date of conversion.
"We are grateful to both our existing and new stockholders for their belief in CrowdGather and the opportunities we are pursuing," chairman and chief executive officer Sanjay Sabnani said in a press release.
"Raising this financing in a difficult environment is a tremendous advantage as we pursue growth through acquisitions. Forums and message-boards have been overlooked for too long despite the fact that they are a core constituency of the internet. We intend to address this disparity by teaming up with other forum owners in order to get forum communities the recognition and revenues they rightfully deserve."
The issuer is a Woodland Hills, Calif.-based internet company that specializes in developing and hosting forum based web sites.
| Issuer: | CrowdGather, Inc.
|
| Issue: | Secured convertible debentures
|
| Amount: | $2.38 million
|
| Maturity: | November 2010
|
| Coupon: | 8%
|
| Price: | Par
|
| Yield: | 8%
|
| Warrants: | For up to 1,599,997 shares
|
| Warrant strike price: | $0.70
|
| Conversion price: | Greater of $0.50 or at 20% discount to VWAP for 10 days prior to conversion
|
| Pricing date: | May 22
|
| Stock symbol: | OTCBB: CRWG
|
| Stock price: | $0.70 at close May 21
|
| Market capitalization: | $34.99 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.
