KALAHEO, HI – KonaRed Corporation announced yesterday that it has entered into a $12 million purchase agreement with Lincoln Park Capital Fund, LLC (“LPC”), a Chicago-based institutional investor.
According to the agreement, LPC committed to invest, at the Company’s sole option, up to $12 million of equity capital over the term of the Purchase Agreement
“This access to capital from LPC increases our flexibility to increase product awareness with consumers via marketing and retail expansion, build inventory, pursue additional product development and formula creation, and continue to build the KonaRed brand,” stated Shaun Roberts, President and CEO of KonaRed.
During the 30-month term of the Purchase Agreement the Company, at its sole discretion, has the right to sell to LPC up to $12 million of its common stock, in amounts as described in the Purchase Agreement and subject to certain conditions, which include the effectiveness of a registration statement with the U.S. Securities and Exchange Commission (the “SEC”) registering the sale of the shares that may be issued to LPC.
The Company controls the timing and amount of any future investment and LPC is obligated to make purchases, if and when the Company elects in accordance with the Purchase Agreement.
There are no upper limits to the price LPC may pay to purchase KonaRed common stock and the purchase price of the shares related to any future investments will be based on the prevailing market prices of the Company’s shares immediately preceding the notice of sale to LPC. LPC has agreed not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company’s shares of common stock.
In consideration for entering into the Purchase Agreement, the Company has issued shares of common stock to LPC as a commitment fee. From the commencement date as set out in the Purchase Agreement, the Purchase Agreement may be terminated by the Company at any time, at its sole discretion, without any monetary cost.
It is the Company’s intention that the proceeds from this investment will be used to increase brand awareness among consumers and retailers via a variety of marketing and sales strategies and for working capital requirements.
A more detailed description of the Purchase Agreement will be set forth in the Company’s Current Report on Form 8-K to be filed with the SEC which the Company encourages be reviewed carefully.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, nor will there be any sale of these securities in any jurisdiction in which such offer solicitation or sale are unlawful prior to registration or qualification under securities laws of any such jurisdiction.
None of the securities issued in connection with the proposed investment have been registered under the United States Securities Act of 1933, as amended (the “Act”), or under the securities laws of any state in the United States, and were issued in reliance upon exemptions from registration under the Act.
None of the securities may be offered or sold in the United States absent registration under the Act or pursuant to an available exemption from such registration requirements.
Source: KonaRed Corporation
