By Sheri Kasprzak
Atlanta, Nov. 19 - e.Digital Corp. said Friday it received $1.75 million through the private placement of convertible preferred stock.
On Nov. 18, the company sold to accredited investors 17,500 shares of series EE convertible preferreds at $100 each.
The preferreds pay dividends of 8% per year and are convertible into about 7 million common shares at $0.25 per share.
After 90 days, the conversion price will be equal to the lower of $0.25 or 85% of the average volume weighted average price per share of any 10 days during 20 consecutive trading days before the conversion date.
The maximum number of shares e.Digital is required to issue upon conversion of the preferreds and payment of dividends in shares is 10,684,211.
The investors in the offering also received warrants for 3.5 million shares at $0.50 through Nov. 18, 2007.
e.Digital Corp. is a San Diego-based designs and provides digital technology platforms. The company plans to use the proceeds from the deal to develop a new proprietary video/audio technology platform. The remainder of the funds will be used for working capital.
| Issuer: | e.Digital Corp.
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| Issue: | Series EE convertible preferred shares
|
| Amount: | $1.75 million
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| Shares: | 17,500
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| Price: | $1,000
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| Dividend: | 8%
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| Conversion price: | $0.25
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| Warrants: | For 3.5 million shares
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| Warrant expiration: | Nov. 18, 2007
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| Warrant strike price: | $0.50
|
| Settlement date: | Nov. 18
|
| Stock price: | $0.26 at close Nov. 18
|
| Stock price: | $0.235 at close Nov. 19
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