Color Star Technology Announces Pricing of Initial $7.0 Million Tranche of up to $33.0 Million Registered Senior Secured Convertible Notes
Color Star Technology Co., (Nasdaq: ADD) has announced the pricing of a $7.0 million initial tranche of up to $33.0 million in registered senior secured convertible notes. The company has entered into agreements with institutional investors to purchase $7.6 million in convertible notes with an 8% original issue discount, resulting in net proceeds of approximately $7 million. The notes have a 12-month maturity and a 6.0% annual interest rate.
The notes will be convertible into Class A Ordinary Shares 45 days after the closing date, with an initial conversion price of $1.60 or an alternative conversion price. The offering also includes registered warrants to purchase up to 2.9 million Ordinary Shares, exercisable 45 days after issuance with a five-year expiration and an exercise price of $1.60 per share. Maxim Group is acting as the sole placement agent for this offering, which is expected to close around September 30, 2024.
Color Star Technology Co., (Nasdaq: ADD) ha annunciato il prezzo di una tranche iniziale di $7,0 milioni su un massimo di $33,0 milioni in note convertibili senior registrate garantite. L'azienda ha stipulato accordi con investitori istituzionali per l'acquisto di $7,6 milioni in note convertibili con uno sconto sull'emissione originale dell'8%, risultando in proventi netti di circa $7 milioni. Le note hanno una scadenza di 12 mesi e un tasso d'interesse annuale del 6,0%.
Le note saranno convertibili in Azioni Ordinarie Classe A 45 giorni dopo la data di chiusura, con un prezzo di conversione iniziale di $1,60 o un prezzo di conversione alternativo. L'offerta include anche warrant registrati per acquistare fino a 2,9 milioni di Azioni Ordinarie, esercitabili 45 giorni dopo l'emissione con una scadenza di cinque anni e un prezzo di esercizio di $1,60 per azione. Maxim Group funge da unico agente placement per questa offerta, che si prevede si chiuderà intorno al 30 settembre 2024.
Color Star Technology Co., (Nasdaq: ADD) ha anunciado el precio de una tranche inicial de $7.0 millones de hasta $33.0 millones en notas convertibles senior registradas garantizadas. La compañía ha firmado acuerdos con inversores institucionales para comprar $7.6 millones en notas convertibles con un descuento del 8% en el valor nominal, lo que resulta en ingresos netos de aproximadamente $7 millones. Las notas tienen un vencimiento de 12 meses y una tasa de interés anual del 6.0%.
Las notas serán convertibles en Acciones Ordinarias Clase A 45 días después de la fecha de cierre, con un precio de conversión inicial de $1.60 o un precio de conversión alternativo. La oferta también incluye warrants registrados para comprar hasta 2.9 millones de Acciones Ordinarias, ejercitables 45 días después de la emisión con un vencimiento de cinco años y un precio de ejercicio de $1.60 por acción. Maxim Group actúa como el único agente de colocación para esta oferta, que se espera cierre alrededor del 30 de septiembre de 2024.
Color Star Technology Co., (Nasdaq: ADD)는 등록된 선순위 담보 전환 사채의 최대 $33.0 백만 달러 중 초기 분할금을 $7.0 백만 달러로 가격 책정했다고 발표했습니다. 이 회사는 기관 투자자들과 계약을 체결하여 $7.6 백만 달러의 전환 사채를 구매하며, 여기에는 8%의 원발행 할인율이 있습니다. 이에 따라 순수익은 약 $7 백만 달러가 될 것으로 예상됩니다. 이 사채는 12개월 만기와 연 6.0%의 이자율을 가지고 있습니다.
사채는 클로징 날짜로부터 45일 후에 A급 보통주로 전환 가능하며, 초기 전환 가격은 $1.60 또는 대안 전환 가격으로 설정됩니다. 이 오퍼링에는 또한 최대 290만 주의 보통주를 구매할 수 있는 등록된 워런트가 포함되어 있으며, 발행일로부터 45일 후에 실행 가능하며 5년 유효기간과 주당 $1.60의 행사 가격을 갖습니다. Maxim Group은 이 오퍼링의 독점 판매 대행사로 활동하고 있으며, 이 오퍼링은 2024년 9월 30일경 마감될 것으로 예상됩니다.
Color Star Technology Co., (Nasdaq: ADD) a annoncé la tarification d'une première tranche de 7,0 millions de dollars d'un maximum de 33,0 millions de dollars en obligations convertibles garanties seniors enregistrées. La société a conclu des accords avec des investisseurs institutionnels pour acheter 7,6 millions de dollars en obligations convertibles avec une remise d'émission initiale de 8%, ce qui conduit à des produits nets d'environ 7 millions de dollars. Les obligations ont une échéance de 12 mois et un taux d'intérêt annuel de 6,0%.
Les obligations pourront être converties en actions ordinaires de classe A 45 jours après la date de clôture, avec un prix de conversion initial de 1,60 $ ou un prix de conversion alternatif. L'offre comprend également des bons enregistrés permettant d'acheter jusqu'à 2,9 millions d'actions ordinaires, exerçables 45 jours après l'émission avec une date d'expiration de cinq ans et un prix d'exercice de 1,60 $ par action. Maxim Group agit en tant qu'agent de placement exclusif pour cette offre, qui devrait se clôturer autour du 30 septembre 2024.
Color Star Technology Co., (Nasdaq: ADD) hat die Preisfestsetzung einer anfänglichen Tranche von $7,0 Millionen von bis zu $33,0 Millionen an registrierten, besicherten, wandelbaren Anleihen bekannt gegeben. Das Unternehmen hat Vereinbarungen mit institutionellen Investoren getroffen, um $7,6 Millionen an wandelbaren Anleihen zu erwerben, mit einem ursprünglichen Ausgabepreis von 8% Rabatt, was zu netto Einnahmen von etwa $7 Millionen führt. Die Anleihen haben eine Laufzeit von 12 Monaten und einen jährlichen Zinssatz von 6,0%.
Die Anleihen können 45 Tage nach dem Abschlussdatum in Klasse A Stammaktien umgewandelt werden, wobei der anfängliche Umwandlungspreis bei $1,60 oder zu einem alternativen Umwandlungspreis liegt. Das Angebot beinhaltet auch registrierte Optionen zum Kauf von bis zu 2,9 Millionen Stammaktien, die 45 Tage nach der Ausgabe ausgeübt werden können, mit einem Fünf-Jahres-Ablauf und einem Ausübungspreis von $1,60 pro Aktie. Maxim Group fungiert als alleiniger Platzierungsagent für dieses Angebot, das voraussichtlich um den 30. September 2024 geschlossen wird.
- Secured $7 million in net proceeds from convertible notes
- Potential for additional $26 million in funding through the same agreement
- Warrants issued with potential to raise additional capital
- 8% original issue discount on convertible notes
- Potential dilution of existing shareholders due to convertible notes and warrants
- Short-term debt with 12-month maturity may create financial pressure
Insights
The pricing of
- The
8% original issue discount and6% interest rate suggest relatively high financing costs. - The conversion price mechanism, set at the lower of
$1.60 or an alternative price, could lead to substantial share dilution if the stock price declines. - The issuance of warrants for 2.9 million shares at
$1.60 exercise price adds another layer of potential dilution.
The possibility of additional
Color Star's focus on entertainment technology and AI application in the industry positions it in a high-growth sector. However, the company's need for substantial financing raises questions about its current revenue generation and market traction. The
Key considerations for investors:
- The company's ability to leverage AI and technology effectively in entertainment applications
- The competitive landscape and Color Star's unique value proposition
- The scalability of their business model and path to profitability
Given the company's relatively small market cap of about
NEW YORK, Sept. 27, 2024 (GLOBE NEWSWIRE) -- Color Star Technology Co., Ltd. (Nasdaq: ADD) (“Color Star” or the “Company”), an entertainment technology company with a global network that focuses on the application of technology and artificial intelligence in the entertainment industry, today announced it has entered into securities purchase agreements with certain institutional investors (the “Investors”) to purchase senior secured convertible notes in the aggregate principal amount of
Under the terms of the securities purchase agreements, the Convertible Notes will be issued to the Investors, together with registered warrants to purchase up to an aggregate of approximately 2.9 million Ordinary Shares. The warrants to be issued at the First Closing will be exercisable 45 days after issuance, subject to certain conditions (the “Initial Exercise Date”), will expire on the five-year anniversary of the Initial Exercise Date, and will have an exercise price of
Maxim Group LLC is acting as the sole placement agent in connection with the offering.
Subject to the satisfaction of certain conditions, the Company and the Investors may mutually agree to the purchase and sale of additional Convertible Notes and accompanying warrants for up to an additional aggregate amount of
The securities described above are being offered pursuant to a shelf registration statement on Form F-3 (File No. 333-281668), which was declared effective by the United States Securities and Exchange Commission (“SEC”) on August 28, 2024. A prospectus supplement relating to the securities will be filed by the Company with the SEC. Copies of the prospectus supplement relating to the offering, together with the accompanying prospectus, can be obtained at the SEC’s website at www.sec.gov or from Maxim Group LLC, 300 Park Avenue, New York, NY 10022, Attention: Syndicate Department, or via email at syndicate@maximgrp.com or telephone at (212) 895-3500.
This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sales of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
About Color Star Technology Co., Ltd.
Color Star Technology Co., Ltd. (Nasdaq: ADD) is an entertainment and education company that provides online entertainment performances and online music education services. Its business operations are conducted through its wholly-owned subsidiaries, Color Metaverse Pte. Ltd. and CACM Group NY, Inc. The Company’s online education is provided through its Color World music and entertainment education platform. More information about the Company can be found at www.colorstarinternational.com and www.colorstar.investorroom.com.
Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantee of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's goals and strategies; the Company's future business development, including the development of the metaverse project; product and service demand and acceptance; changes in technology; economic conditions; the growth of the educational and training services market internationally where ADD conducts its business; reputation and brand; the impact of competition and pricing; government regulations; the ability of Color Star to meet NASDAQ listing standards in connection with the consummation of the transaction contemplated therein; and other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in other reports and other public filings with the Securities and Exchange Commission by Color Star. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward–looking statements to reflect events or circumstances that arise after the date hereof unless required by applicable laws, regulations or rules.
Contact
Color Star Investor Relations
Office Number No. 1003, 9th Floor,
7 World Trade Center, Suite 4621
New York NY 10007
Office: (212) 410-5186
Email ir@colorstarinternational.com
FAQ
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