InterCloud Systems Inc. (ICLD)

[Stockdawger]

Hey just trying to break down these 8% promissory notes due Oct 9th 2017.

Term Loan – 8% Convertible Promissory Notes

Effective as of October 9, 2014, the Company consummated the acquisition of all of the outstanding membership interests of VaultLogix and its affiliated entities for an aggregate purchase price of $36,796. The purchase price for the acquisition was payable to the sellers as follows: (i) $16,385 in cash, (ii) 252,173 shares of the Company’s common stock and (iii) $15,626 in unsecured convertible promissory notes. The closing payments are subject to customary working capital adjustments.

The promissory notes accrue interest at a rate of 8% per annum, and all principal and interest accrued under the promissory notes is payable on October 9, 2017. The promissory notes are convertible into shares of the Company’s common stock at a conversion price equal to $25.48 per share. A portion of the principal amount of the promissory notes equal to 20% of the principal amount on the closing date were not convertible until January 9, 2016.

On a date when (i) the shares are freely tradeable without restriction or volume limitations under Rule 144, and (ii) the average closing price of the Company’s common stock is 105% or higher of the conversion price on the three (3) trading days immediately prior to such date, the Company may deliver notice to the holders of the promissory notes electing to convert some or all of the outstanding amounts owed under the promissory notes into common stock at the applicable conversion price.

Additionally, if on or after the maturity date, (i) the Company is restricted or otherwise unable to pay in cash all outstanding amounts under the promissory notes, (ii) the promissory notes have not otherwise been paid in full within ten business days following the maturity date, or (iii) the Company is not at such time entitled to effect a forced conversion, then, in the event that both (i) and (iii) above apply, the Company, and in the event that both (ii) and (iii) above apply, the holders of the promissory notes, shall have the right to convert all outstanding amounts owing under the promissory notes into shares of the Company’s common stock at a conversion price equal to the average closing price of the Company’s common stock on the three trading days immediately preceding the date of such conversion.

As of June 30, 2017, the Company had not forced any conversions.

https://www.sec.gov/cgi-bin/viewer?action=view&cik=1128725&accession_number=0001213900-17-008704&xbrl_type=v#

The way I am interpreting -

1) If the company can't pay the notes in full and they are not paid after 10 business days VaultLoxgix can convert their 14.4M + interest promissory notes into common shares. If they decide to convert, and the 3 days preceding have a share closing of $0.015, $0.016, $0.017, they could convert the 14.4M at a p/s of $0.016 or 900,000,000 shares?