Bob Sillerman’s mysterious Function (X) hasn’t yet launched its first mobile media product, but it has raised some more cash on Wall Street. This time it’s $35 million, which may grow to $91 million.
Function (X) announced that it had completed the placement of 14 million units at a purchase price of $2.50 per unit, for a total equity raise of $35 million. Each unit consists of one share of the company’s common stock and one warrant to purchase one share of common stock. The warrants are exercisable at $4.00 a share. Assuming all warrants are exercised, the company will receive total proceeds of $91 million at an average sale price of $3.25 a share, the announcement stated.
That placement was well below the recent market price for the stock. The lowest close this month was $4.75 on August 22. The stock closed Thursday (8/25) at $6.50.
One of the buyers was Sillerman himself. His purchase wasn’t immediately spelled out, but the company said he “invested significantly” in the offering. “By making this investment in Function(x), investors are recognizing the potential for our business growth. We appreciate their endorsement of our strategy and look forward to continuing to deliver on our strategic plan,” Sillerman said.
Function (X) said it expects to use the gross proceeds from the offering, after deducting offering expenses, for general corporate purposes, including marketing and product development.
Tejas Securities Group, Inc. and Craig-Hallum Capital Group LLC acted as placement agents in connection with the offering.
RBR-TVBR observation: Once the euphoria wore off from the launch of this new company (through acquisition of a public shell) the stock price has retreated from the lofty heights of $53.90 (pre-reverse split) to below $10 in recent weeks – most recently around $6.50. People who rushed to get a piece of Sillerman’s newest venture would have done well to be patient.