PETALUMA, Calif. -- Cyan, Inc. (NYSE:CYNI) has announced the pricing of $50.0 million aggregate principal amount of its 8.0% Convertible Senior Secured Notes due 2019 and related warrants to purchase 11.25 million shares of the company’s common stock to be issued to qualified institutional buyers and accredited investors pursuant to Regulation D under the Securities Act of 1933.
In connection with this offering, the company has the option to issue up to an additional $10.0 million in aggregate principal amount of notes and related warrants within 13 days of the original issuance date. The warrants will expire on December 15, 2017 and will be exercisable on or after January 15, 2016. Certain existing stockholders and officers have agreed to purchase $17.0 million of notes and related warrants.
The sale of the notes and related warrants is expected to settle on December 12, 2014, subject to customary closing conditions, and is expected to result in approximately $46.6 million in net proceeds to the company after deducting estimated offering expenses payable by the company (assuming no additional notes and related warrants are issued).
The company expects to use approximately $3.8 million of the net proceeds from the offering to repay in full all amounts outstanding under its existing credit facility. In addition, the company will deposit $12.0 million into an escrow account to fund, when due, the first six scheduled semi-annual interest payments on the notes. The Company expects to use the remaining net proceeds for general corporate purposes, including for working capital and capital expenditures.