By Devika Patel
Knoxville, Tenn., April 21 - Morlex, Inc. raised $4.4 million in a private placement of junior convertible unsecured promissory notes and shares, according to an 8-K filed Monday with the Securities and Exchange Commission.
The $2.4 million in notes have a 10% coupon and will mature April 15, 2009. Interest is payable at maturity or upon conversion of the notes; it is payable, at the company's option, either in cash or common stock valued at 90% of the weighted average trading price for the 10 days preceding the interest payment date.
The notes are convertible into common shares at any time with an initial conversion price of $0.75. They will be automatically converted into common stock upon the earlier of a public offering of common stock that nets at least $7.5 million or a private placement of common stock that nets at least $5 million, together with the proceeds from the notes.
The company engaged Joseph Gunnar & Co., LLC as agent for the stock offering. Joseph Gunnar will be paid a 10% commission.
Proceeds will be used for the company's acquisition of Ad Authority, Inc.
Morlex, based in New York, recently acquired RightSide Holdings, Inc., Duncan Media Group, Inc. and All Ad Acquisition, Inc.
It is now an internet-focused customer acquisition company with multiple revenue streams from pay-per-click, list rental, subscription and general advertising. It owns more than 1,000 domains with approximately one million unique visitors per month.
| Issuer: | Morlex, Inc.
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| Issue: | Junior convertible unsecured promissory notes, common shares
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| Amount: | $4.4 million
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| Warrants: | No
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| Settlement date: | April 21
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| Stock symbol: | OTCBB: MORX
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| Stock price: | $5.50 at close April 21
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| Notes
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| Amount: | $2.4 million
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| Maturity: | April 15, 2009
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| Coupon: | 10%, payable at maturity or upon conversion in cash or common shares
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| Price: | Par
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| Yield: | 10%
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| Conversion price: | $0.75
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| Shares
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| Amount: | $2 million
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| Agent: | Joseph Gunnar & Co., LLC
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| Fees: | 10%
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