MSU Devices Obtains Unsecured Loan Financing to Replace Previously Announced Secured Bridge Loan Financing
DALLAS--(BUSINESS WIRE)--March 28, 2002--MSU Devices Inc.
(OTCBB:MUCP - news) announced today that the Company issued in a private
placement $838,500 of 11.5% Unsecured Notes (``11.5% Notes'') which
mature on July 31, 2002. Of the total amount, $637,500 of the 11.5%
Notes were issued in exchange for the $637,500 of 10% Secured Notes
previously issued by the Company and the secured bridge loan facility
announced by the Company on February 14, 2002 was terminated in full.
Of the 11.5% Notes issued in the exchange, $500,000 was issued to a
related party. The remaining $201,000 of 11.5% Notes were sold for
cash to other investors.
The terms of the 11.5% Notes require the Company to raise an
additional $1,162,500 on the following schedule: at least $250,000 not
later than April 1, 2002; $412,500 not later than April 15, 2002; and
$500,000 not later than May 10, 2002. In the event the Company does
not raise these additional funds it will be in default and the
noteholders can accelerate the maturity of the 11.5% Notes. If the
Company does not raise the funds required to be received by April 15,
2002, the holders of the 11.5% Notes can elect to secure their notes
by a first priority lien on the assets of the Company, including
intangible assets and intellectual property.
The 11.5% Notes are convertible at any time 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 such
conversion. If the Company arranges $3.5 million in additional
financing beyond the $1,162,500 noted above, the 11.5% Notes will
automatically convert into the instruments issued in such financing,
on certain terms.
The 11.5% Notes, as well as the common stock into which the 11.5%
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.
