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FalconStor Software Closes on $3 Million Financing Commitment from Hale Capital
FalconStor Software Closes on $3 Million Financing Commitment from Hale Capital.
About this update from Falconstor Software, Inc.
[{"type":"text","content":"\n\n MELVILLE, N.Y., Feb. 26, 2018 (GLOBE NEWSWIRE) -- FalconStor Software, Inc. (OTCMKTS:FALC) (“FalconStor” or the “Company”), today announced that the Company has closed on its previously-announced commitment (the “Commitment”) from HCP-FVA, LLC (“HCP-FVA”), an affiliate of Hale Capital Partners, LP (together with HCP-FVA, “Hale Capital”), to purchase up to $3 million of units from the Company to backstop a proposed private placement of units to certain eligible stockholders of the Company (the “Financing”).  Hale Capital subscribed for the full $3 million of units in the Financing (at the Company’s election) by payment of $2.5 million in cash and the conversion of a $500,000 short-term loan provided by HCP-FVA to the Company in November 2017 (the “Bridge Loan”) into units.\n In the Financing, the Company intends to offer to FalconStor stockholders as of November 17, 2017 who are accredited investors the opportunity to purchase up to a total of 40 million units (inclusive of subscriptions by Hale Capital).  The Financing is expected to close on or before September 23, 2018, and documentation relating to the Financing will be provided to prospective investors subsequent to the closing of the Commitment.  Each unit is expected to consist of: $0.10 in senior secured debt (for a total of $4 million of senior secured debt assuming full subscription of the Financing), secured by all of the assets of the Company and guaranteed by each of the Company’s domestic subsidiaries, having an interest rate of prime plus 0.75% and a maturity date of June 30, 2021;warrants to purchase 12.233 shares of the Company’s common stock for a nominal exercise price (for a total of 489.32 million shares assuming full subscription of the Financing); and0.0225 shares of the Company’s Series A Redeemable Preferred Stock (the “Series A Preferred Stock”) at a per unit price of $0.2643 (subject to increase to take into account accretion of the Series A Preferred Stock after June 30, 2018), all such shares to be acquired directly from their current holder, HCP-FVA. The closing of the Commitment effectively constitutes Hale Capital’s purchase of 30 million units in the Financing.  As a result, the maximum additional f...