Convertible promissory note due 2015 sold with 100% warrant coverage
By Devika Patel
Knoxville, Tenn., April 7 - Arrogene, Inc. sold $330,000 of convertible promissory notes on March 28, according to an 8-K filed Monday with the Securities and Exchange Commission.
The 10% note is due in one year and may be converted into common shares.
If the company has completed a public offering prior to the note's maturity, the conversion price will be equal to 50% of the price per share of the stock or stock equivalent sold in the initial public offering. If the company has not completed an IPO before the note matures, but has developed a public trading market for its stock, the conversion price will be 50% of the 30-day volume-weighted average price of the stock. If it has not developed a public market for its stock prior to maturity, the conversion price will be $1.00 per share.
Investors also received 100% warrant coverage. The warrants are each exercisable at the note's conversion price for five years.
Proceeds will be used for working capital.
The private Santa Monica, Calif., company is building a pipeline of new generation nanomedicines in conjunction with Cedar Sinai Medical Center that are capable of targeting cancer cells and preventing tumor growth.
| Issuer: | Arrogene, Inc.
|
| Issue: | Convertible promissory note
|
| Amount: | $330,000
|
| Maturity: | One year
|
| Coupon: | 10%
|
| Conversion price: | 50% of the price per share of the stock or stock equivalent sold in the company's initial public offering; 50% of the 30-day volume-weighted average price of the stock; or $1.00 per share
|
| Warrants: | 100% coverage
|
| Warrant expiration: | Five years
|
| Warrant strike price: | 50% of the price per share of the stock or stock equivalent sold in the company's initial public offering; 50% of the 30-day volume-weighted average price of the stock; or $1.00 per share
|
| Settlement date: | March 28
|
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