JACKSONVILLE, Fla., June 22 /PRNewswire-FirstCall/ -- FNDS3000 Corp (OTC Bulletin Board: FDTC) (Frankfurt: "FT4," A0MWLG), a financial transaction processing services company currently introducing prepaid card programs to the South African market, today announced that it has successfully raised gross proceeds of $1 million via a private equity financing with an existing institutional shareholder. In addition, the Company reported that it has arranged for the conversion of $1.5 million in outstanding promissory notes to equity.
Pursuant to a financing agreement, the Company issued to an existing institutional shareholder 5,714,286 shares of restricted common stock at a price of $0.175 per share; as well as a warrant to purchase 5,714,286 common shares at an exercise price of $0.175, and a warrant to purchase an additional 4,000,000 common shares at an exercise price of $0.25. The term of the warrants is 24 months. In a related transaction, the Company paid one of its independent directors a referral fee of $50,000 and a warrant to purchase 1,000,000 shares of common stock at an exercise price of $0.20 per share. The term of the warrant is for 36 months.
The Company offered and sold the common stock and warrants to a qualified accredited investor, in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended, and therefore the transaction has not been registered under the Securities Act or any state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.
The Company also announced that the holders of its outstanding $1.5 million 10% Convertible Promissory Notes ("Notes") have elected to convert the outstanding balance of the Notes into common stock of FNDS3000, which were scheduled to mature on August 31, 2010. Under the terms of the Notes, holders have converted the outstanding amounts of debt to the Company's common shares at a price of $0.15 and $0.175 per share, respectively. As a result of this conversion, the Company will issue 9,523,811 common shares in payment of the principal amount of $1.5 million and 1,091,708 shares in payment of accrued interest of $164,927 as full and final settlement of the Notes.
Sherington Holdings, LLC, which is owned by the Chairman of the Company, Raymond Goldsmith, converted $1.25 million of the Notes discussed above. As a result of the conversion, Sherington and Goldsmith now collectively own 47.79% of the Company's 68,959,019 shares outstanding.
John Hancock, Chief Executive Officer, commented, "The ability to opportunistically access outside capital effectively augments our strategic initiatives. The capital raise and our investors' election to convert the promissory notes demonstrate investor confidence in our Company, employees and our growth strategy. The conversion of debt to equity materially strengthens our underpinning financial footing and provides us with a cleaner capital structure. Moreover, both transactions announced today will enhance our ability to execute our planned strategies to accelerate growth and increase shareholder value at this early stage in our development as we continue to ramp up the number of cards distributed and activated, expand our market footprint through additional channels of distribution and introduce new types of prepaid card offerings."
The material terms of the financing agreement and the conversion of the Company's promissory notes are outlined in a Form 8-K filed today with the Securities and Exchange Commission. The Company further noted that it may need to secure additional financing in the foreseeable future to cover operating expenditures and future developments until such time as positive cash flow is achieved. There is no guarantee that the Company will prove successful in obtaining such future financing or that such financing, if closed, will be on reasonable terms.
About FNDS3000 Corp
FNDS3000 Corp (OTC Bulletin Board: FDTC) (Frankfurt: "FT4," A0MWLG) is a financial transaction processing service company. Since its inception, its focus has been on the development and implementation of a variety of prepaid card programs outside the United States, including services to individuals who lack access to conventional banking services. FNDS3000 meets a vital need of companies that have financial dealings with such individuals by offering prepaid cards that can be tailored to the differing requirements of each customer. FNDS3000 intends to provide these services in both developed and underdeveloped nations through a proven U.S. processing platform that has been designed for international and cross border capability. Many of these FNDS3000 products carry worldwide brand marks and can be used anywhere that accepts these brands. Programs that can be supported include payroll, insurance, medical aid, gift cards, prepaid cellular charges and small-scale international transfers of funds.
Forward Looking Statements
Matters discussed in this press release contain forward looking statements. Investors are cautioned that such forward looking statements involve risk and uncertainties, which could significantly impact the actual results, performance, or achievements of the Company. Such risks and uncertainties include, but are not limited to, the potential loss of our relationships with each of the parties that sponsor our cards and banks that manufacture, issue, and own the cards; the loss of our service providers; security breaches of our electronic information; the inability to raise sufficient capital to fund its operations; and other risks as may be detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. The Company assumes no obligation to publicly update or revise its forward looking statements even if experience or future events make it clear that any of the projected results expressed or implied herein will not be realized.
SOURCE FNDS3000 Corp