The terms are atrocious, but there's another $600K raised.
MSU Devices Obtains Bridge Loan Financing
DALLAS--(BUSINESS WIRE)--Feb. 14, 2002--MSU Devices Inc.
(OTCBB:MUCP - news) announced today that the Company issued approximately
$638,000 in 10% convertible promissory notes (``10% Promissory Notes'')
in a private placement, which notes mature on July 31, 2002.
Of that total, $500,000 was issued to a related party. The 10%
Promissory Notes are secured by all of the assets of the Company
including all intangible assets and intellectual property of the
Company. The covenants of the 10% Promissory Notes require the Company
to raise an additional $1.362 million within 105 days after Feb. 14,
2002, the date of the closing of the issuance of the initial 10%
Promissory Notes. The additional funds must be received according to
the following schedule: at least $362,500 within 45 days after the
initial closing, at least an additional $500,000 within 75 days after
the initial closing; and at least an additional $500,000 within 105
days after the date of the initial closing. In the event the Company
does not raise the funds as required under the aforementioned
schedule, as well as funds to repay the 10% Promissory Notes at
maturity, the Company will be in default, and the holders of the 10%
Promissory Notes will be able to foreclose their security interest in
all of the assets of the Company. The 10% Promissory Notes are
convertible at anytime at the option of the investors into shares of
common stock at a rate of 10 shares per $1 loaned, subject to
adjustment in certain events. The Company has granted registration
rights with respect to shares issuable upon conversion. If the Company arranges $3.5 million in additional financing (beyond the $1.362
million required under the 10% Promissory Notes), the 10% Promissory
Notes automatically convert into the instruments issued in such
financing, on certain terms.
The 10% Promissory Notes, as well as the common stock into which
the 10% Promissory Notes are convertible, have not been registered
under the Securities Act of 1933, as amended, and may not be offered
or sold in the United States absent registration or an applicable
exemption from registration requirements.
This announcement does not constitute an offer to sell or the
solicitation of offers to buy any security and shall not constitute an
offer, solicitation, or sale of any security in any jurisdiction in
which such offer, solicitation, or sale would be unlawful. This press
release is being issued pursuant to and in accordance with Rule 135c
under the Securities Act of 1933, as amended.
Contact:
MSU Devices Inc., Dallas
Bruce Walter, 972/473-6916
AI
