During the quarter, we raised an additional $150,000 from the issuance of short-term convertible notes to our current investors as well as $400,000 for Ironridge Global in connection with our $5 million stock purchase agreement.
Under our agreement with Ironridge Global, the shares were granted registration rights, which we filed a form S-3 on November 2nd. Once this S-3 becomes effective, we are able to receive $250,000 investment tranches each month up to the $5 million commitment subject to customary reps and warranties and market volume related closing conditions.
Subsequent to the end of quarter, we entered into an Exchange Agreement with Magna Group pursuant to which we agreed to issue convertible notes in aggregate principle amount of $4.6 million as a condition for posting our outstanding term loan with Compass Horizon. This purchase Magna will occur in tranches of $500,000 over a specified period in order for us to conduct our annual shareholders meeting to satisfy a NASDAQ list requirement associating with quantity of shares issued.
As of Nov 14th - 2.1 had already been converted... It is now Jan 4th.. up to you to decide.
We expect this purchase to be completed in the first quarter of 2013; however this allows us to eliminate our future principle and interest payments to Compass Horizon. Once this purchase is completed resulting in a quarterly cash flow savings in excess of $600,000.
Based on our expectations on a timing of this repayment, we have reclassified the full carrying value of our term loan to current liabilities. In connection with our agreement with Magna, we entered into a Note Purchase Agreement with Hanover Holdings for an aggregate of $800,000 of convertible promissory notes. These notes will be sold and funded in tranches of $100,000 over specified periods through the first quarter of 2013 also related to our Annual Shareholders Meeting requirement.
Accessing additional working capital for the company was imperative to continue as growing concern. In completing these transactions, we were not able to negotiate from a position of strength in order to minimize our dilution, however we are grateful for the support and what a confidence we receive Ironridge and Magna.
We believe this will provide us with the necessary liquidity to continue to bridge our efforts towards realizing new revenue opportunities in emerging markets as well as significantly reducing our future cash requirements associated with repayment of our senior term loan.
tranche this tranche that, this is a tsunami of tranches
