Onstream Media, a provider of live and on-demand internet broadcasting, corporate web communications and virtual marketplace technology, has signed an agreement to sell its securities to Lincoln Park Capital Fund, a Chicago-based institutional investor.
Under the agreement, LPC has agreed to invest gross proceeds of USD900,000 in Onstream in exchange for 300,000 shares of common stock at USD1.25 per share, preferred shares convertible into 420,000 shares of common stock at a fixed conversion price of USD1.25 per share and a one-time commitment fee of 50,000 common shares.
USD1.25 per share represented an approximately 34 per cent premium to the closing bid price of USD0.93 per ONSM share on 16 September 2010, the day prior to entering into the agreement.
Under the agreement, LPC will also receive warrants to purchase 540,000 shares of ONSM common stock at USD2.00 per share.
"We are pleased to secure this investment from LPC, priced at a premium to market even after considering the Nasdaq computed value of the warrants. This investment accomplishes our financing goals of minimum dilution to our current investors and bringing on board a new fundamental institutional investor with a significant stake in the company. It comes at an important time for us as we are continuing to execute on our legacy business, including audio and web conferencing, digital media services and webcasting, as well as the initial launch of our MarketPlace365 product offering," says Randy Selman, president and chief executive of Onstream Media.