Item 1.01. Entry Into Material Definitive Agreement.
On July 17, 2014, Wireless Ronin received orders for products and services
valued at $1.1 million from an existing automotive customer, consisting of
RoninCast software, content design and creation, hardware and installation
services. Wireless Ronin expects to complete these orders during the third
quarter of 2014. In addition, the company expects that these orders will also
result in an increase of annual hosting fees based on the increase in the number
of deployed client nodes under management.
On July 16, 2014, Wireless Ronin Technologies, Inc. obtained a $400,000 loan
from an accredited investor and issued in exchange a secured convertible
promissory note together with a five-year warrant to purchase up to 153,846
shares of the company's common stock at a per-share price of $0.70, in a private
placement exempt from registration under the Securities Act of 1933.
The promissory note bears interest at the annual rate of 12%, and matures on
July 16, 2015. At any time prior to the maturity date, the investor may convert
the outstanding principal and accrued and unpaid interest on the promissory note
at a conversion rate of $0.65 per share, as adjusted for stock splits and
similar adjustments. All outstanding principal and accrued and unpaid interest
on the promissory note must be paid in full prior to the consummation of a
change in control transaction involving Wireless Ronin, or upon Wireless Ronin
raising aggregate gross proceeds of at least $3.5 million in an equity
financing. Wireless Ronin may prepay the promissory note after six months
without penalty, and the promissory note otherwise contains customary terms.
In addition, Wireless Ronin had earlier obtained a $200,000 loan, in exchange
for its issuance of an unsecured convertible promissory note bearing interest at
the annual rate of 10% together with a three-year warrant to purchase up
to 153,846 common shares at a per-share price of $0.75, as part of a private
placement transaction the terms of which were disclosed in a Current Report on
Form 8-K filed with the SEC on June 13, 2014.
Wireless Ronin offered and sold the foregoing securities in reliance on the
statutory exemptions from registration under Section 4(a)(2) of the Securities
Act, including Rule 506 thereunder. The company relied on this exemption based
on the fact that all investors were accredited investors. The offer and sale of
securities in the private placements were not registered under the Securities
Act of 1933, and those securities therefore may not be offered or sold in the
United States absent registration or an applicable exemption from registration
requirements. The disclosure about the private placement contained in this
report does not constitute an offer to sell or a solicitation of an offer to buy
any securities of the company, and is made only as required under applicable
rules for filing current reports with the SEC, and as permitted under Rule 135c
of the Securities Act of 1933.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosures about the issuance of the promissory notes contained in Item
1.01 above are hereby incorporated into this item. Wireless Ronin's obligations
under the promissory notes may be accelerated upon customary events, such as
payment defaults and events of bankruptcy.
Item 3.02. Unregistered Sales of Equity Securities.
The disclosures in Item 1.01 with regards to the issuance by Wireless Ronin of
promissory notes convertible into shares of common stock, and warrants providing
the right to purchase common stock, are hereby incorporated into this item.