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ISC8 INC. /DE FILES (8-K) Disclosing Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

May 30, 2014



Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

In connection with the offering of senior subordinated secured convertible promissory notes ("Notes") previously disclosed in the Current Reports on Form 8-K filed by the Company on March 12, 2014 and April 11, 2014, the Company entered into additional Note Purchase Agreements ("Purchase Agreements") with certain accredited investors (the "Investors"), resulting in the issuance of Notes in the aggregate principal amount of $724,000. To date, the Company has entered into Purchase Agreements, and issued Notes in the aggregate principal amount of approximately $2.7 million. The Notes accrue interest at a rate of 12% per annum and mature on July 31, 2014. Additionally, in the event the Company consummates a debt or equity financing resulting in gross proceeds of at least $4.0 million (a "Qualified Financing"), the then outstanding principal balance of the Notes, plus all accrued but unpaid interest, will convert into the securities issued in connection with the Qualified Financing.

Per the terms of the Purchase Agreements, the Notes were issued with an original issue discount of 25%. As of the date hereof, the Company has received gross proceeds of approximately $2.0 million from the issuance of the Notes. The Company intends to use these proceeds for general working capital purposes.

Disclaimer.

The descriptions of the Notes and the Purchase Agreements in this Current Report on Form 8-K do not purport to be complete, and are qualified in their entirety by reference to the form of Note and form of Purchase Agreement attached as Exhibits 10.1 and 10.2 respectively, to the Current Report on Form 8-K filed by the Company on March 12, 2014.

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Source: Edgar Glimpses


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