BSGM Revises Yorkville Debenture Deal; Two $25M Tranches, 20% Conversion Floor
Rhea-AI Filing Summary
BioSig Technologies amended a secured convertible debenture purchase agreement with YA II PN, Ltd. (Yorkville). The Amendment revises the transaction structure to provide a first secured convertible debenture in the principal amount of $25,000,000 and a second secured convertible debenture in the principal amount of $25,000,000, with additional secured convertible debentures available in an aggregate principal amount of up to $50,000,000 only upon mutual agreement of the parties.
The Amendment also modifies certain purchase, closing and stockholder approval provisions and updates related terms, including setting the conversion floor price at 20% of the Nasdaq Official Closing Price immediately prior to the date of entry into the original Debenture Purchase Agreement. The full Amendment is filed as Exhibit 10.1.
Positive
- Defines staged secured financing: Establishes a first $25,000,000 and second $25,000,000 secured convertible debenture, creating a clear funding structure.
- Optional additional capacity: Permits up to $50,000,000 in additional secured convertible debentures by mutual agreement, allowing potential further capital if both parties consent.
- Conversion floor specified: Sets a concrete conversion floor at 20% of the Nasdaq Official Closing Price, removing uncertainty about a conversion pricing mechanism.
Negative
- Potential dilution: Convertible debentures, if converted, will dilute existing shareholders; the Amendment makes conversion mechanics explicit.
- Low conversion floor: The 20% floor could permit conversions at a steep discount to market price, increasing dilution severity.
- Secured claim priority: Debentures are secured, which may prioritize these creditors over unsecured stakeholders in adverse scenarios.
- Additional issuance not guaranteed: Further debentures up to $50,000,000 require mutual agreement and may be withheld at either partys sole discretion.
Insights
TL;DR: Material financing amendment creates $50M initial secured convertible structure with optional additional capacity, improving funding flexibility but raising dilution concerns.
The Amendment explicitly establishes two secured convertible debentures of $25,000,000 each and permits up to an additional $50,000,000 by mutual agreement. These provisions are material because they define the principal amounts, security status and conversion mechanics that will affect the companys capital structure. The set conversion floor at 20% of the Nasdaq Official Closing Price is a concrete term that limits conversion price but could enable conversion at a substantial discount to prevailing market prices. Changes to purchase, closing and stockholder approval provisions indicate amended governance and execution mechanics tied to the financing. Overall, this is a mixed, material financing event that improves potential liquidity while introducing conversion-related dilution risk.
TL;DR: The Amendment secures staged convertible funding and grants discretionary ability for further issuance, creating potential shareholder dilution and governance implications.
The explicit terms—two secured convertible debentures of $25,000,000 each and additional debentures up to $50,000,000 only by mutual consent—establish both committed tranches and optional capacity. The secured nature gives lender priority over unsecured stakeholders, and the 20% conversion floor fixes a low-side conversion threshold relative to the reference Nasdaq price. Modifications to stockholder approval and closing mechanics may affect timetables for realization and shareholder rights. Given these elements, the Amendment is material and carries governance and dilution implications that investors should note.
FAQ
What did BioSig (BSGM) amend with Yorkville?
How much total principal could be issued under the amended agreement?
What conversion pricing terms were changed?
Does the Amendment change shareholder approval or closing conditions?
Where can investors read the full Amendment?
