Examples of Initial 2019 Notes in a sentence
In addition, the Company has the right to modify one of the Initial 2019 Notes (totaling $1.8 million) in the event the holder does not convert upon next equity financing to adjust the interest rate to 4% per annum.
Upon the occurrence of an event of default, the Initial 2019 Notes will either automatically become due and payable or can become due and payable at the holder’s option (based on the nature of the event of default).
In the event of a change in control, the holder can elect to convert the Initial 2019 Notes into shares of common stock at a conversion price equal to (i) the product of the change in control purchase price multiplied by 75%, divided by (ii) the total number of outstanding shares of capital stock of the Company (on a fully diluted basis).
We note that the notion of dominance in Milgrom andSegal (2018) is also weaker than strict dominance.Proposition 2 tackles the case of underbidding and parallels Proposition 1: Proposition 2.
The Initial 2019 Notes bear interest at 6% per annum and mature two to five years after their respective issuance dates.
The Company assessed the embedded features within the Initial 2019 Notes and determined that the automatic or optional conversion feature upon next equity financing and the optional conversion feature upon change in control (share-settled redemption features), the additional interest feature, and the interest rate adjustment feature met the definition of a derivative and were not clearly and closely related to the host contract and required separate accounting.
In addition, the Company issued 1,000,000 shares of Legacy Hyliion common stock to a noteholder of the 2018 Note, Initial 2019 Notes, and January 2020 Note, with a grant date fair value of $10.00 per share in accordance with the Commercial Matters Agreement (see Note 14).In connection with this conversion of the convertible notes, the Company recorded a loss on extinguishment of $10.2 million included within other income (expense) on the accompanying consolidated statements of operations.
One of the Initial 2019 Notes (totaling $1.8 million) is secured by substantially all of the assets of the Company, subordinate to the first priority, senior secured interest held by a note holder of a convertible note issued in January 2020.
F-16 The Initial 2019 Notes include the following embedded features: (a) Automatic or optional (for one of the Initial 2019 Notes) conversion upon the next equity financing of at least $15.0 million in proceeds (the “Next Equity Financing”).
We issued to the 2018 Noteholder $10,000,000 worth of our Common Stock, as of immediately prior to the Effective Time, in consideration for the Note Amendments and for any future services to be provided pursuant to the terms of the New Services Agreement.Between February and July 2019, we issued the Initial 2019 Notes in exchange for cash totaling approximately$13.6 million.