WEBB does a floorless with Castle Creek. Excerpt from 9/2/99 8-K.
On August 26, 1999, Online System Services, Inc. (d/b/a Webb Interactive Services, Inc.) ("OSS") completed a bridge financing in the amount of $5 million provided by Castle Creek Technology Partners LLC, a technology focused investment firm. Paine Webber Incorporated served as placement agent and advisor on the transaction. The securities were issued without registration pursuant to the Securities Act of 1933 in reliance upon the exemption therefrom
provided in Regulation D of such Act.
The financing was in the form of a redeemable Promissory Note which becomes convertible into shares of OSS' common stock if not previously redeemed, 120 days after issuance at a maximum conversion price equal to the lesser of 110% of the Market Price for OSS common stock on August 25, 1999, or the average of the five lowest closing bid prices during the 15 trading days prior to conversion.
In addition to the Note, the investor was issued a five-year Warrant
representing the right to acquire 136,519 shares of OSS' common stock at $11.44 per share. OSS is in the process of determining a fair market value of the Warrant and the Promissory Note. Once the fair value of the Warrant and the Promissory Note have been determined, OSS will discount the Promissory Note appropriately and will record additional non-cash charges for interest expense over the life of the Promissory Note for the amortization of the discount. The discount is expected to be from approximately $500,000 to $1.1 million. In addition, during the 120-day period following the issuance of the Note, OSS will record a non-cash charge for accretion relating to the so-called beneficial conversion feature of the Note. A determination of the value of the beneficial conversion feature is dependent upon the value attributed to the Warrant discussed above. The beneficial conversion feature is expected to be from approximately $1.3 million to $1.9 million. The shares subject to the Warrant and to the Note, should the Note become convertible, are subject to registration
rights. For additional information regarding the transaction, reference is made to Exhibits 10.1 and 10.2 filed herewith.
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