$CRWG $3.5MIL SALE OF SUBSIDIARY AND HUGE DEBT REDUCTION:
CALABASAS, CA--(Marketwired - Jun 9, 2016) - CrowdGather, Inc. ( OTCQB : CRWG ) --
Funding follows recent sale of Plaor gaming subsidiary for $3.5M; 43% reduction in corporate debt; and fixed price conversion of remaining convertible debt
Company seeks to 'gather the crowd' online through cannabis forums and offline through cannabis coworking spaces
Specialty Cannabis and consumer publishing network, CrowdGather, Inc. ( OTCQB : CRWG ), today announced a corporate restructuring including an initial closing of $125,000 in convertible debt financing following upon the recent sale of CrowdGather's gaming subsidiary, Plaor, Inc, as well as an agreement with the Company's creditor, Iconic Holdings, for a negotiated conversion at a fixed price of $0.01 per share. The investment round is anticipated to not exceed $500,000 of which up to $350,000 will be cash and $150,000 will be conversions of outstanding debt owed to the company's officers and directors for loans and financial considerations they provided the company with. The funds will be converted into equity at $0.01 per share within 90 days from funding, or earlier if Iconic converts its final outstanding balance into equity prior to the 90-day window. In addition to converting their debt into equity at $0.01 per share, investors will also receive 50% warrant coverage at $0.03 per share. CrowdGather intends to use the funds to grow its cannabis publishing network and also to enter the burgeoning space for cannabis coworking office space.
"We have spent two years battling against market forces in order to get our company positioned as it currently is," said Company Chairman and CEO, Sanjay Sabnani. "We are now finally within reach of raising the equity funding that will allow us to build two solid, cash flow positive businesses. Online, we will continue to gather the crowd online through cannabis and enthusiast discussion communities, but we will also now gather the crowd offline through physical venues wherein cannabis entrepreneurs can run their dynamic businesses from our exciting cannabis coworking office spaces. By simplifying our business model and operations, we expect to be at breakeven by the end of this calendar year and in a position to scale our coworking operations in additional markets by next year."
As previously announced, total consideration offered for the purchase of Plaor by Native Games America, LLC was $3,500,000 in aggregate including cash, debt and liability assumption as well as deferred payments. With the sale of Plaor, the company has initially reduced its debt by approximately $2,300,000 or 43% of total liabilities.
About CrowdGather, Inc.
CrowdGather, Inc. is an investor, acquirer, operator and owner of digital assets in the consumer and cannabis sectors. In 2016, CrowdGather intends to launch a crowdfunding portal at CrowdGather to assist cannabis and digital startups in procuring financing. The Company's online publishing network is anchored by DIY community builder, Yuku.com while its cannabis holdings include long standing online communities WeedTracker and RapMusic.
CALABASAS, CA--(Marketwired - Jun 9, 2016) - CrowdGather, Inc. ( OTCQB : CRWG ) --
Funding follows recent sale of Plaor gaming subsidiary for $3.5M; 43% reduction in corporate debt; and fixed price conversion of remaining convertible debt
Company seeks to 'gather the crowd' online through cannabis forums and offline through cannabis coworking spaces
Specialty Cannabis and consumer publishing network, CrowdGather, Inc. ( OTCQB : CRWG ), today announced a corporate restructuring including an initial closing of $125,000 in convertible debt financing following upon the recent sale of CrowdGather's gaming subsidiary, Plaor, Inc, as well as an agreement with the Company's creditor, Iconic Holdings, for a negotiated conversion at a fixed price of $0.01 per share. The investment round is anticipated to not exceed $500,000 of which up to $350,000 will be cash and $150,000 will be conversions of outstanding debt owed to the company's officers and directors for loans and financial considerations they provided the company with. The funds will be converted into equity at $0.01 per share within 90 days from funding, or earlier if Iconic converts its final outstanding balance into equity prior to the 90-day window. In addition to converting their debt into equity at $0.01 per share, investors will also receive 50% warrant coverage at $0.03 per share. CrowdGather intends to use the funds to grow its cannabis publishing network and also to enter the burgeoning space for cannabis coworking office space.
"We have spent two years battling against market forces in order to get our company positioned as it currently is," said Company Chairman and CEO, Sanjay Sabnani. "We are now finally within reach of raising the equity funding that will allow us to build two solid, cash flow positive businesses. Online, we will continue to gather the crowd online through cannabis and enthusiast discussion communities, but we will also now gather the crowd offline through physical venues wherein cannabis entrepreneurs can run their dynamic businesses from our exciting cannabis coworking office spaces. By simplifying our business model and operations, we expect to be at breakeven by the end of this calendar year and in a position to scale our coworking operations in additional markets by next year."
As previously announced, total consideration offered for the purchase of Plaor by Native Games America, LLC was $3,500,000 in aggregate including cash, debt and liability assumption as well as deferred payments. With the sale of Plaor, the company has initially reduced its debt by approximately $2,300,000 or 43% of total liabilities.
About CrowdGather, Inc.
CrowdGather, Inc. is an investor, acquirer, operator and owner of digital assets in the consumer and cannabis sectors. In 2016, CrowdGather intends to launch a crowdfunding portal at CrowdGather to assist cannabis and digital startups in procuring financing. The Company's online publishing network is anchored by DIY community builder, Yuku.com while its cannabis holdings include long standing online communities WeedTracker and RapMusic.
