Color Star Technology (ADD, Financial) announced on Friday that it has signed a securities purchase agreement with certain institutional investors. The agreement involves the purchase of senior secured convertible notes amounting to $7.6 million in principal. These notes come with an 8% original issue discount and will mature within 12 months from the issuance date. The deal is expected to bring in approximately $7 million in net proceeds for the company.
The convertible notes have an annual interest rate of 6% and can be converted into the company's Class A common stock 45 days after the initial closing date. The initial conversion price is set at $1.60 per share or the alternative conversion price specified in the notes, whichever is lower.
The first closing is expected to take place around September 30.
