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MicroAlgo Inc. has entered into agreements with certain investors for the issuance of convertible notes totaling $80 million, with the first tranche of $20 million issued on Monday. The notes, which have a term of 360 days, come with an original issue discount of $6.4 million, and the company will cover all transaction expenses.
The notes give investors the right to convert the outstanding balance into Class A ordinary shares at a conversion price based on 70% of the lowest market closing price of the company’s ordinary shares in the 90 trading days prior to the conversion request. The conversion ratio is subject to adjustments in case of stock splits, dividends, or similar transactions.
MicroAlgo has included an ownership limitation clause, allowing it to decline conversions that would result in an investor owning more than 9.99% of the company’s outstanding ordinary shares post-conversion.
If an event of default occurs, the interest rate on the outstanding balance will increase to 10% per annum, with investors retaining the right to convert until the balance is fully paid.
The net proceeds from the offering will be used for working capital and general corporate purposes. The terms of the Convertible Note Purchase Agreements and the notes are detailed in exhibits attached to the SEC filing, which is incorporated by reference into the company’s Form F-3 registration statement.
This financial move, based on a press release statement, reflects MicroAlgo Inc.’s strategy to strengthen its capital structure and support its ongoing operations.
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