OneRoof Energy, Inc, a residential solar services provider and wholly owned subsidiary of OneRoof Energy Group, Inc.recently announced that the Company and OneRoof Energy have agreed to a financing in the total principal amount of $1,500,000. The $1,500,000 consists of a secured non-convertible note (the “Note”) issued to Black Coral Capital, LLC (“Black Coral”), a current investor in OneRoof Energy.
The Note is secured by the assets of the Company that are not otherwise pledged under project financings (the “Available Assets”). The Available Assets are already pledged as security under the Company’s senior credit agreements, as well as the agreements governing the Company’s subordinated convertible notes. The Note is subject to substantially the same terms and conditions as the Company’s outstanding subordinated convertible notes, with the following differences:
(1) the Note is not convertible into equity;
(2) the Note bears an interest rate of 16% per annum compounded monthly; and
(3) any voluntary prepayment of any installment of the Note requires the payment of a penalty equal to one-ninth (1/9) of the principal amount of the installment of the Loan, but no prepayment is required by the Note or permitted by the senior credit agreement. The Note is secured on the Available Assets under an amended and restated security and pledge agreement dated October 21, 2013, as amended, between OneRoof Energy, the Company and OneRoof Energy’s existing investors. Amounts outstanding at maturity will be repaid in cash generated from operations or through refinancing, depending on the terms available at the end of the term of the Note.
The financing transaction is subject to all applicable regulatory approvals, including the acceptance of the TSXV.
The proceeds from the Note will be used for general working capital purposes, including general and administrative, IT development and investment in solar projects.