Message #15 From:
NewsBot Date: December 6, 2006 05:05:00 PM
REDI News Remote Dynamics, Inc. Announces Closing of Series B Secured Convertible Note and Warrant Private Placement and Acquisition of BounceGPS, Inc.
RICHARDSON, Texas--(BUSINESS WIRE)--Remote Dynamics, Inc. (OTCBB: REDI), a leading provider of
telematics-based management solutions for commercial fleets, today
reported that the Company has entered into a Note and Warrant Purchase
Agreement for the sale of up to $1,754,000 of series B secured
convertible notes (“Series B Notes”),
including original issue discount notes (“OID
Notes”) in the aggregate amount of $701,600,
in a private placement transaction with several institutional and
accredited investors.
The private placement is structured to occur in four closings, each
providing $438,500 in gross proceeds to the Company. The first closing
occurred on December 4, 2005. The second closing will occur within five
business days after the date that the Company files a preliminary proxy
statement with the SEC with respect to stockholder approval of an
increase in the number of its authorized shares of common stock to at
least 575,000,000 and a one-for-fifty reverse stock split of its common
stock. The third closing will occur within five business days after the
date that the Company files an amendment to its Certificate of
Incorporation making effective the increase in number of authorized
shares and the reverse stock split. The fourth closing will occur within
five business days after the date that an initial resale registration
statement for the shares underlying the notes and warrants issued in the
private placement is declared effective by the SEC. Each closing is
subject to certain other conditions being satisfied, as more fully
described in the Company’s Form 8-K filing
with the SEC dated December 6, 2006.
Midtown Partners & Co., LLC, and NASD member firm, acted as the sole
placement agent in the private placement. In connection with the private
placement, the Company will pay to Midtown Partners consideration
consisting of (a) a cash sales commission of $150,480, (b) warrants to
purchase 54,723,333 shares of common stock (representing 15% of the
aggregate number of shares of common stock issuable upon conversion of
the notes sold in the private placement and issued pursuant to the Share
Exchange Agreement), with each warrant having an exercise price of
$0.016 per share and being exercisable for ten years, (c) E-7 Warrants
to purchase 29,525,000 shares of common stock (representing 15% of the
aggregate number of shares of common stock underlying the E-7 Warrants
sold in the private placement and issued pursuant to the Share Exchange
Agreement), and (d) F-4 Warrants to purchase 29,525,000 shares of common
stock (representing 15% of the aggregate number of shares of common
stock underlying the F-4 Warrants sold in the private placement and
issued pursuant to the Share Exchange Agreement). The Company also
agreed to pay legal fees in the amount of $35,000 to legal counsel for
the investors in the private placement.
The Series B Notes and the OID Notes are secured by all of the assets of
the Company, subject to existing liens, are due December 4, 2009 and
begin amortization of principal (in nine quarterly installments) on
August 1, 2007. The Company may make principal installment payments in
cash or in registered shares of the Company’s
common stock. If paid in common stock, certain conditions must be
satisfied, and the number of registered shares to be paid to the holder
must be an amount equal to the principal installment amount divided by
the greater of (i) $0.02 and (ii) 90% of the average of the volume
weighted average trading prices of the common stock for the ten trading
days immediately preceding the principal payment. The Series B Notes and
OID Notes are convertible into Company common stock at an initial
conversion price of $0.016 per share, subject to reduction if the
Company fails to achieve specified financial and operating milestones
and subject to adjustment for stock splits and combinations, certain
dividends and distributions, reclassification, exchange or substitution,
reorganization, merger, consolidation or sales of assets; issuances of
additional shares of common stock, and issuances of common stock
equivalents.
The purchasers of the notes also received the following common stock
purchase warrants:
Series E-7 Warrant to purchase up to 82,218,750 million shares in the
aggregate of common stock at an exercise price of $0.02 per share;
Series F-4 Warrant to purchase 82,218,750 million shares in the
aggregate of common stock at an exercise price of $0.03 per share;
The exercise of all of the E-7 and F-4 and C-3 warrants would result in
the Company’s receipt of up to $4,110,937 in
additional cash proceeds.
As a result of the private placement and pursuant to the terms of "most
favored nations" rights granted to investors in the Company’s
February 2006 private placement of its series A senior secured
convertible notes (“Series A Notes”),
the Company expects to issue to certain of its February 2006 private
placement investors, in exchange for $1,652,111 principal amount of the
Series A Notes, an additional (i) $1,784,111 principal amount of Series
B Notes, (ii) $713,644 principal amount of OID Notes, (iii) E-7 Warrants
to purchase 83,690,203 shares of its common stock and (iv) F-4 Warrants
to purchase 83,690,203 shares of its common stock. The Company will
receive no additional proceeds from the exchange.
"With the closing of this transaction and our recently implemented cost
saving initiatives, we currently believe that the company has sufficient
working capital to fund operations until the company achieves positive
cash flow, said Neil Read, the Company’s Vice
President, Chief Financial Officer, Treasurer and Secretary. We are
pleased with the vote of confidence placed in our newly revised business
plan by our existing and new investors."
The Company also announced that it has entered into a Share Exchange
Agreement in which the Company acquired 100% of the capital stock of
BounceGPS, Inc., and issued to the sole stockholder of BounceGPS, Inc.
the following:
5,000 shares of the Company’s newly
authorized series C convertible preferred stock (“Series
C Preferred Stock”)
A Series B Note in the principal amount of $660,000
An OID Note in the principal amount of $264,000
An E-7 Warrant to purchase 30,937,500 shares of common stock
A F-4 Warrant to purchase 30,937,500 shares of common stock
The Series C Preferred Stock is convertible into the Company’s
common stock at an initial conversion rate equal to (x) 51% of the
number of the Company’s fully diluted shares divided
by (y) the number of shares of Series C Preferred Stock originally
issued.
David Walters, who became Chairman of the Company’s
Board of Directors upon completion of the acquisition, said: “We
are excited about the opportunity to move the BounceGPS operations
forward in combination with Remote Dynamics.”
The terms of the Series C Preferred Stock are more fully described in
the Certificate of Designations, Preferences and Rights of the Series C
Preferred Stock which is attached as Exhibit 10.9 to the Form 8-K filed
by the Company on December 6, 2006 with the SEC.
The Company intends to use the net proceeds from the financing
transaction to fund its business plan.
The Company is obligated to register the common stock issuable upon
conversion of the Series B Notes, OID Notes, the exercise of the Series
E-7 and F-4 warrants and shares underlying the Series C Preferred Stock
for public resale under the Securities Act of 1933, as amended. The
company is further required to seek stockholder approval to amend the
Company’s certificate of incorporation to
increase the number of shares of common stock authorized to 525,000,000
and to effectuate a reverse split of its common stock at a ratio of
one-for-fifty shares. Each holder of a secured convertible note is
restricted from either converting the notes into the Company’s
common stock or exercising the warrants for the purchase of the Company’s
common stock to the extent that such conversions or exercises would
result in the holder beneficially owning more than 4.9 percent of the
Company’s common stock, or 9.9 percent of the
Company’s common stock without providing the
Company at least 61 days prior notice of its intent to waive the
applicable conversion restriction.
The Company intends to file a Form 8-K with the SEC on December 6, 2006,
which will be available at the SEC’s website
at http://www.sec.gov,
that will include all of the agreements entered into between the
investors in the Series B offering and the Company and the agreements
for the acquisition of BounceGPS, Inc.
About Remote Dynamics:
Remote Dynamics, Inc. provides patented state-of-the-art mobile resource
management solutions that contribute to higher customer revenues,
enhanced operator efficiency and improved cost control. Combining GPS
and wireless telematics with supply chain management, the company’s
solutions improve mobile worker productivity through real-time position
and route reporting, as well as exception-based reporting that analyzes
mobile workforce inefficiencies for operational optimization. More
information about Remote Dynamics is available online at http://www.remotedynamics.com.
Trusted by owners and managers in utility contracting, green and many
industries, BounceGPS, Inc. delivers GPS-based fleet management
solutions to a wide range of companies. The company’s
solutions include loss prevention, driver performance monitoring, and
vehicle and asset tracking. More information about BounceGPS, Inc. is
available online at http://www.bouncegps.com.
About Midtown Partners & Co., LLC:
Originally founded in May 2000, Midtown Partners & Co., LLC is an
investment bank focused on private placement investment banking
opportunities. The investment banking group at Midtown Partners & Co.,
LLC was founded on the premise that client relationships and industry
focus are keys to the success of emerging growth companies. Such
companies require investment banking services from a firm with a unique
understanding of the marketplace and the nature of these transactions.
Additional information can be found at http://www.midtownpartners.com.
