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MicroAlgo Inc., a company specializing in computer programming services, has announced a new convertible note transaction with certain investors. On Monday, the company entered into Convertible Note Purchase Agreements with these investors, issuing Unsecured Convertible Promissory Notes with an aggregate original principal amount of $36 million.
The notes, which were issued today, have a term of 360 days starting from May 8, 2025. They carry an original issue discount of $2.88 million, and the company is responsible for the costs and expenses related to the transaction.
Investors have the option to convert the outstanding balance of the notes into Class A ordinary shares of the company, based on a formula that considers the market closing price of the shares over the past 60 trading days. The conversion price is 70% of the lowest closing price, rounded down to the nearest two decimal places. This conversion feature is adjustable in case of corporate actions like share splits or dividends.
The company has set an ownership limitation, allowing it to decline conversions that would result in an investor owning over 9.99% of the outstanding ordinary shares post-conversion.
In the event of a default, as defined in the note, the interest rate will increase to 10% per annum. However, investors will retain their conversion rights until the outstanding balance is fully paid.
MicroAlgo intends to use the net proceeds from the note offering for working capital and general corporate purposes. The details of the Purchase Agreements and the Notes are summarized from the material terms provided in the SEC filing, which includes the prospectus supplement filed on the SEC’s website. This report is based on a press release statement and is incorporated by reference into the company’s registration statement on Form F-3.
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