Bluerush Inc. said it has entered into an agreement with a US-registered securities broker-dealer, under which the company will issue on a private placement basis up to 100 million units at a price of US$0.05 per unit for aggregate gross proceeds of up to US$5 million.
The company said it intends to use the net proceeds from the offering for general working capital.
In addition, the company has granted the placement agent an option to increase the offering by an additional US$1 million for an additional 20 million units to cover over-allotments.
Each unit shall consist of one common share of the company and one-half of one transferable common share purchase warrant. Each whole warrant shall entitle the holder to acquire one additional common share at a price of US$0.075 per share until the date that is forty-eight months from the closing.
READ: BlueRush joins the Brightcove Marketplace, enabling customers to personalize videos
The expiry date of the warrants may be accelerated by the company if the volume-weighted average price of the shares on the TSX Venture Exchange (TSXV) is greater than US$0.20 for any twenty consecutive trading days, and one of the following events is true: the volume averages 250,000 shares a day during that period; the company is uplisted in the United States; the common shares underlying the warrants are registered under the United States Securities Act of 1933, as amended; or the common shares trade at US$3.00 per share or higher for twenty consecutive days (provided a reverse split of not more than one for 15 has been completed).
At which time the company may, within 10 business days of the acceleration event, accelerate the expiry date of the warrants by issuing a press release announcing the reduced warrant term whereupon the warrants will expire on the 60th calendar day after the date of such press release.
In connection with the offering, the placement agent will receive a cash commission equal to 10.0% of the aggregate gross proceeds of the offering. In addition, the agent will receive non-transferable warrants exercisable at any time prior to the date that is 60 months from the closing to acquire that number of common shares equal to 10.0% of the number of units issued under the offering. The cash commission and agent's warrants shall be reduced to 5.0% for subscribers identified on the company's President's List.
In addition, the company shall pay the placement agent a fee equal to 3.0% of the aggregate exercise price of exercised Warrants (excluding President's List Subscribers), if applicable.
The offering is to be made in the United States under available exemptions from the registration requirements under the 1933 Act, and such other jurisdictions (including in the provinces of Canada) as may be agreed to by the company and the Placement Agent, by way of private placement exemptions from applicable prospectus and registration requirements, subject to the receipt of necessary regulatory approvals.
The common shares and warrants forming part of the units, and any common shares issuable upon exercise of warrants, will be subject to a statutory hold period of four months and one day from the date of issuance of the units.
The offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the TSXV.
Bluerush develops and markets IndiVideo, a disruptive, award-winning interactive personalized video platform that drives return on investment throughout the customer lifecycle, from increased conversions to more engaging statements and customer care.
IndiVideo enables Bluerush clients to capture knowledge and data from their customers' video interaction, creating new and compelling data-driven customer insights.
Contact the author at jon.hopkins@proactiveinvestors.com