Note 10 – Subsequent Events
On April 20, 2017, the Company borrowed $40,000 under an unsecured credit facility with a private, third-party lender which is convertible at a rate of $5.00 per share. The facility is represented by promissory notes that matures on April 19, 2018.
On May 7, 2015, the Company completed a private placement of a $12.0 million principal amount Senior Secured Convertible Note and warrant to purchase 18,000,000 shares of the Company’s common stock, $0.0001 par value.
The Note and Warrant were issued pursuant to a Securities Purchase Agreement, dated May 3, 2015, by and between the Company and an institutional investor. The Investor acquired the Note by paying $450,000 in cash and issuing a secured promissory note, secured by cash, with an aggregate initial principal amount of $9,550,000 (the “Investor Note”).
On May 4, 2017, the Investor notified the Company that it elected to effect an Investor Optional Offset under Section 7(a) of the Investor Note of the full $9,490,000 principal amount outstanding under the Investor Note against $9,490,000 in aggregate principal outstanding under the Convertible Note. It did so by surrendering and concurrently cancelling $9,490,000 in aggregate principal of the Convertible Note in exchange for the satisfaction in full and cancellation of the Investor Note. The Convertible Note had an aggregate outstanding principal balance of $11,687,231 as of the date of the exchange. The Investor requested the Company to deliver a new convertible note with respect to the remaining principal balance of $2,197,231 to replace the original Convertible Note.
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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