Series B Convertible Preferred Stock Offering
On February 14, 2018, we commenced our offering (the “Series B Offering”) to sell up to $10 million of our Series B Convertible Preferred Stock on a best efforts basis without any minimum offering amount. On March 30, 2018, we completed the Series B Offering, pursuant to which we sold 381,173 shares of Series B Convertible Preferred Stock at an offering price of $9.50 per share and we received gross proceeds in aggregate of $3,621,143. The net proceeds from the Series B Offering were $3,289,861 after deducting commissions, closing and issuance costs. Upon the receipt of the proceeds of the Series B Offering, the notes (the “2017 Notes”) issued in our private placement that was consummated in 2017 (the “2017 Private Placement”) in the principal amount of $7,254,349 automatically converted into 1,577,033 shares of common stock.
The Series B Convertible Preferred Stock pays cumulative dividends from the date of original issue at a rate of 5.0% per annum payable quarterly in arrears on or about the last day of March, June, September and December of each year, beginning June 30, 2018. The Series B Convertible Preferred Stock ranks senior to our outstanding Series A Convertible Preferred Stock and our common stock par value $0.001 with respect to dividend rights and rights upon liquidation, dissolution or winding up. Each holder of Series B Convertible Preferred Stock received a credit towards our merchandise equal to ten percent (10%) of the amount of their investment up to a maximum credit of $1,000. Holders of the Series B Convertible Preferred Stock have limited voting rights. Each share of Series B Convertible Preferred Stock is initially convertible at any time, in whole or in part, at the option of the holders, at an initial conversion price of $4.75 per share, into two shares of common stock and automatically converts into two shares of common stock on its two-year anniversary of issuance. The offering price of the Series B Convertible Preferred Stock was $9.50 per share. The shares of Series B Convertible Preferred Stock issued in the Series B Offering were sold pursuant to our Registration Statement, which was declared effective on February 13, 2018.per 10q
