Promissory notes were sold with five-year warrants for 780,000 shares
By Devika Patel
Knoxville, Tenn., March 20 – Brekford Corp. sold $715,000 of 6% convertible promissory notes in a $650,000 private placement on March 17, according to an 8-K filed Friday with the Securities and Exchange Commission. It may sell $440,000 of additional notes for $400,000 by May 1.
The notes are due on March 17, 2017 and convert to common stock at a conversion price equal to the lesser of $0.25 per share and 70% of the average of the lowest three volume-weighted average prices of the stock for the 12 trading days preceding conversion, with a floor of $0.10 per share.
The notes may be put after one year and may be redeemed at 110.
The investor also received five-year warrants for 780,000 common shares, which are each exercisable at $0.50, a 92.31% premium to $0.26, the closing price of the stock on March 16. If the second closing occurs, the investor will receive 480,000 additional warrants for that tranche.
The public safety technology services provider is based in Hanover, Md.
| Issuer: | Brekford Corp.
|
| Issue: | Convertible promissory notes
|
| Amount: | $1,155,000
|
| Maturity: | March 17, 2017
|
| Coupon: | 6%
|
| Price: | $1.05 million
|
| Call: | At 110
|
| Put: | After one year
|
| Conversion price: | The lesser of $0.25 per share and 70% of the average of the lowest three volume-weighted average prices of the stock for the 12 trading days preceding conversion, with a floor of $0.10 per share
|
| Warrants: | For 780,000 shares (first tranche); for 480,000 shares (second tranche)
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.50
|
| Settlement dates: | March 17 (for $715,000), May 1 (for $440,000)
|
| Stock symbol: | OTCBB: BFDI
|
| Stock price: | $0.26 at close March 16
|
| Market capitalization: | $11.57 million
|
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