Two Hands Corp Secures $75K in Highly Dilutive Convertible Note Financing
Summary
Two Hands Corp entered into a securities purchase agreement for a $94,300 convertible promissory note, receiving $75,000 in net proceeds after significant fees. The note features a deep discount conversion price and high prepayment penalties, indicating a costly capital raise.
Key Events · Financing and Capital Events · TWOH
-
Secured Convertible Note
Two Hands Corp received $75,000 in net proceeds from a $94,300 convertible promissory note with Vanquish Funding Group LLC.
-
Highly Dilutive Terms
The note is convertible at a 25% discount to the lowest closing bid price over 10 trading days, potentially leading to significant dilution for existing shareholders.
-
High Financing Costs
The company incurred $7,000 in legal and due diligence fees, reducing the effective capital raised to $75,000 from the $82,000 purchase price.
-
Prepayment Penalties
The note includes substantial prepayment penalties, ranging from 115% to 125% of the outstanding amount, depending on the prepayment period.
Analysis · TWOH · Trade & Services
This financing provides Two Hands Corp with much-needed capital for general working capital purposes, but at a substantial cost to existing shareholders. The convertible note includes a 25% discount to the lowest bid price over a 10-day period, which is highly dilutive. Additionally, the company incurred $7,000 in legal and due diligence fees, further reducing the net proceeds. The aggressive conversion terms and high prepayment penalties (up to 125%) suggest the company faced limited options for securing funding, which could put significant downward pressure on the stock price as the note becomes convertible.
At the time of this filing, TWOH was trading at $0.00 on OTC in the Trade & Services sector, with a market capitalization of approximately $11.7M. The 52-week trading range was $0.00 to $0.01. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.