CALABASAS, CA--(Marketwired - Jun 9, 2016) - CrowdGather, Inc. (OTCQB: CRWG) --
- Funding follows recent sale of Plaor gaming subsidiary for $3.5M; 43% reduction in corporate debt; and fixed price conversion of remaining convertible debt
- Company seeks to 'gather the crowd' online through cannabis forums and offline through cannabis coworking spaces
Specialty Cannabis and consumer publishing network, CrowdGather, Inc. (OTCQB: CRWG), today announced a corporate restructuring including an initial closing of $125,000 in convertible debt financing following upon the recent sale of CrowdGather's gaming subsidiary, Plaor, Inc, as well as an agreement with the Company's creditor, Iconic Holdings, for a negotiated conversion at a fixed price of $0.01 per share. The investment round is anticipated to not exceed $500,000 of which up to $350,000 will be cash and $150,000 will be conversions of outstanding debt owed to the company's officers and directors for loans and financial considerations they provided the company with. The funds will be converted into equity at $0.01 per share within 90 days from funding, or earlier if Iconic converts its final outstanding balance into equity prior to the 90-day window. In addition to converting their debt into equity at $0.01 per share, investors will also receive 50% warrant coverage at $0.03 per share. CrowdGather intends to use the funds to grow its cannabis publishing network and also to enter the burgeoning space for cannabis coworking office space.
"We have spent two years battling against market forces in order to get our company positioned as it currently is," said Company Chairman and CEO, Sanjay Sabnani. "We are now finally within reach of raising the equity funding that will allow us to build two solid, cash flow positive businesses. Online, we will continue to gather the crowd online through cannabis and enthusiast discussion communities, but we will also now gather the crowd offline through physical venues wherein cannabis entrepreneurs can run their dynamic businesses from our exciting cannabis coworking office spaces. By simplifying our business model and operations, we expect to be at breakeven by the end of this calendar year and in a position to scale our coworking operations in additional markets by next year."
As previously announced, total consideration offered for the purchase of Plaor by Native Games America, LLC was $3,500,000 in aggregate including cash, debt and liability assumption as well as deferred payments. With the sale of Plaor, the company has initially reduced its debt by approximately $2,300,000 or 43% of total liabilities.
About CrowdGather, Inc.
CrowdGather, Inc. is an investor, acquirer, operator and owner of digital assets in the consumer and cannabis sectors. In 2016, CrowdGather intends to launch a crowdfunding portal at CrowdGather to assist cannabis and digital startups in procuring financing. The Company's online publishing network is anchored by DIY community builder, Yuku.com while its cannabis holdings include long standing online communities WeedTracker and RapMusic.
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth and business strategy. Words such as "expects," "will," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations on such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in the Company's business; general economic, industry and market sector conditions; the ability to generate increased revenues from the Company's forums; the ability to obtain additional financing; the ability to manage the Company's growth; the ability to develop and market new technologies to respond to rapid technological changes; competitive factors in the market(s) in which the Company operates; and other events, factors and risks disclosed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.