HDS International Closes Financing, Exploring Crowd Sourcing and Rights Offering
ST. LOUIS, MO -- April 13, 2015 -- InvestorHub NewsWire -- HDS International Corp. (OTC: HDSI), a technology development company, today announced that it has begun receiving funding from a West Coast-based institutional investor that committed $4.6 million in debt and equity capital to the Company earlier this month. Specifically, the Company took the first $40,000 from this investor under a $600,000 debt commitment last Thursday, and executed an equity term sheet with the investor for up to $4 million in contractually committed funding over the next 36 months. That same investor has purchased an initial note from a New York investment group and optioned the second note owned by that same group, with a final closing deadline in early May 2015. The equity facility funds at the discretion of the Company upon filing and effectiveness of a registration statement and may require an uplisting of HDSI to the OTCQB marketplace. The terms of the financing programs allow the Company to obtain additional funding from other sources in certain instances.
HDSI worked with its investment banking firm Source Capital Group, Inc. (“SCG”) to negotiate these agreements. According to HDSI CEO Paul Rauner, SCG deferred fees associated with the initial control transaction and for this round of funding, accruing its fees so that they may be disbursed at a later date under mutual agreement between HDSI and SCG in the form of equity and/or notes. “Our banker, Vik Grover, has gone above and beyond, deferring fees and even structuring a personal investment in the company because he believes we are building the world’s next-generation E-911 and disaster management and response platform.” The Company has indicated that the immediate funding goal remains to source the $600,000 required to ‘vest’ an exclusive license to SirenGPS technology in HDSI. The investment vehicles put in place are adequate to meet that goal.
Additionally, HDSI intends to explore a follow on round of funding that would allow existing shareholders as of a record date to make a direct investment in the Company. Rauner explained: “The traditional model to raise money in a public company is to issue shares to an institutional investor under advantageous terms only available to select investors. Under the JOBS Act, there has been a proliferation of ‘crowd funding’ that opens up markets normally not accessible to the average investor and we would like to do something similar for our shareholders. The basic concept is to give our early stage shareholders an opportunity for direct investment in HDSI, letting them purchase preferred shares in HDSI thereby mitigating dilution from our institutional financing program over the next year. There is some diligence that needs to be done, but the model we are exploring is to attach a tradable option to each share which will grant the holder a right to participate in a preferred equity investment round. The current financing gives us ample runway to achieve our near-term objectives while we determine how to reward our loyal shareholders for their continued support. These attached rights may or may not trade in the public market. Participation may require evidence of investor positions in certificate form.”
As a result of the aforementioned financing activities, HDSI intends to file form 10-K and other required SEC disclosures later this week, thereby remaining compliant with financial reporting requirements of regulators.
ST. LOUIS, MO -- April 13, 2015 -- InvestorHub NewsWire -- HDS International Corp. (OTC: HDSI), a technology development company, today announced that it has begun receiving funding from a West Coast-based institutional investor that committed $4.6 million in debt and equity capital to the Company earlier this month. Specifically, the Company took the first $40,000 from this investor under a $600,000 debt commitment last Thursday, and executed an equity term sheet with the investor for up to $4 million in contractually committed funding over the next 36 months. That same investor has purchased an initial note from a New York investment group and optioned the second note owned by that same group, with a final closing deadline in early May 2015. The equity facility funds at the discretion of the Company upon filing and effectiveness of a registration statement and may require an uplisting of HDSI to the OTCQB marketplace. The terms of the financing programs allow the Company to obtain additional funding from other sources in certain instances.
HDSI worked with its investment banking firm Source Capital Group, Inc. (“SCG”) to negotiate these agreements. According to HDSI CEO Paul Rauner, SCG deferred fees associated with the initial control transaction and for this round of funding, accruing its fees so that they may be disbursed at a later date under mutual agreement between HDSI and SCG in the form of equity and/or notes. “Our banker, Vik Grover, has gone above and beyond, deferring fees and even structuring a personal investment in the company because he believes we are building the world’s next-generation E-911 and disaster management and response platform.” The Company has indicated that the immediate funding goal remains to source the $600,000 required to ‘vest’ an exclusive license to SirenGPS technology in HDSI. The investment vehicles put in place are adequate to meet that goal.
Additionally, HDSI intends to explore a follow on round of funding that would allow existing shareholders as of a record date to make a direct investment in the Company. Rauner explained: “The traditional model to raise money in a public company is to issue shares to an institutional investor under advantageous terms only available to select investors. Under the JOBS Act, there has been a proliferation of ‘crowd funding’ that opens up markets normally not accessible to the average investor and we would like to do something similar for our shareholders. The basic concept is to give our early stage shareholders an opportunity for direct investment in HDSI, letting them purchase preferred shares in HDSI thereby mitigating dilution from our institutional financing program over the next year. There is some diligence that needs to be done, but the model we are exploring is to attach a tradable option to each share which will grant the holder a right to participate in a preferred equity investment round. The current financing gives us ample runway to achieve our near-term objectives while we determine how to reward our loyal shareholders for their continued support. These attached rights may or may not trade in the public market. Participation may require evidence of investor positions in certificate form.”
As a result of the aforementioned financing activities, HDSI intends to file form 10-K and other required SEC disclosures later this week, thereby remaining compliant with financial reporting requirements of regulators.
