Deal sells three-year 10% notes with warrants for 37.5 million shares
By Devika Patel
Knoxville, Tenn., Oct. 16 – AudioEye, Inc. said it plans a $3.75 million private placement of convertible promissory notes.
The 10% notes mature in three years. Interest is payable in kind. If the company conducts an equity financing of at least $2 million, the notes and accrued interest will convert into a number of securities sold in the financing at 60% of the per-share price of offering.
The investors also will receive five-year warrants for 37.5 million shares, which are each exercisable at $0.10. The strike price is a 66.67% premium to the Oct. 15 closing share price of $0.06.
Settlement of the initial $2.5 million tranche with warrants for 25 million shares is expected Nov. 8 and the final tranche is expected to close by Oct. 9, 2018.
Proceeds will be used for debt repayment, working capital and general corporate purposes.
The Tucson company develops media creation and content management software that enables website owners to render their websites in complete audio format.
| Issuer: | AudioEye, Inc.
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| Issue: | Convertible promissory notes
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| Amount: | $3.75 million
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| Maturity: | Three years
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| Coupon: | 10%
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| Conversion price: | $0.25
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| Warrants: | For 37.5 million shares
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| Warrant expiration: | 60 months
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| Warrant strike price: | $0.10
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| Pricing date: | Oct. 16
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| Settlement date: | Nov. 8 (for $2.5 million), Oct. 9, 2018
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| Stock symbol: | OTCBB: AEYE
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| Stock price: | $0.06 at close Oct. 15
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| Market capitalization: | $4.09 million
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