To obtain funding for the purpose of payment of general corporate and operating expenses IGIA, Inc. (the "Company") entered into a Securities Purchase Agreement (the "Agreement") with New Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC (collectively, the "Investors") on July 27, 2006 for the sale of (i) $500,000 in callable secured convertible notes (the "Notes") and (ii) stock purchase warrants (the "Warrants") to buy 75,000,000 shares of our common stock.
On July 27, 2006, the Investors purchased the $500,000 in Notes and received Warrants to purchase an aggregate of 75,000,000 shares of our common stock. The Company received net proceeds of $89,933.79, after deducting expenses of $15,066.21, and $395,000 was placed in escrow to be distributed to the Company in equal payment over the subsequent four months.
The Notes bear interest at 6%, mature three years from the date of issuance, and are convertible into our common stock, at the Investors' option, at a conversion price equal to the lower of (i) $0.04 or (ii) 25% of the average of the three lowest intraday trading prices for our common stock during the 20 trading days before, but not including, the conversion date. As of July 26, 2006, the average of the three lowest intraday trading prices for our common stock during the preceding 20 trading days as reported on the Over-The-Counter Bulletin Board was $0.0042 and, therefore, the conversion price for the secured convertible notes was $0.00105. Based on this conversion price, the $500,000 Notes, excluding interest, were convertible into 476,190,476 shares of our common stock.
We may prepay the Notes in the event that no event of default exists, there are a sufficient number of shares available for conversion of the callable secured convertible notes and the market price is at or below $.06 per share. The full principal amount of the Notes is due upon default under the terms of Notes. In addition, we have granted the Investors a security interest in substantially all of our assets and intellectual property as well as registration rights.
The Warrants are exercisable until seven years from the date of issuance at a purchase price of $0.009 per share. In addition, the exercise price of the Warrants is adjusted in the event we issue common stock at a price below market.
The Investors have contractually agreed to restrict their ability to convert the Notes and exercise the Warrants and receive shares of our common stock such that the number of shares of the Company common stock held by them and their affiliates after such conversion or exercise does not exceed 4.99% of the Company's then issued and outstanding shares of common stock.
In addition, in connection with the foregoing financing, the Company has agreed to amend the terms of the $760,000 in notes issued to the Investors on June 7, 2006 to provide that the notes are convertible into our common stock, at the Investors' option, at a conversion price equal to the lower of (i) $0.04 or (ii) 25% of the average of the three lowest intraday trading prices for our common stock during the 20 trading days before, but not including, the conversion date. The notes when issued were convertible into our common stock at a conversion price equal to the lower of (i) $0.04 or (ii) 35% of the average of the lowest intraday trading prices for our common stock during the 20 days before, but not including, the conversion date.
-------------------- trashed and scattered again Posts: 629 | From: Boston | Registered: Jan 2006
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