Dot Ai Enters Non-Binding Letter Of Intent With Unnamed Investor For Up To $5M Convertible Preferred Stock Investment, And A Separate Non-Binding Letter With An Unnamed Buyer To Sell A Portion Of Its Operations For ~$6M In Cash
Cid Holdco Inc DAIC | 0.00 |
$5.0 Million Strategic Preferred Investment
Under the non-binding term sheet, the Investor would invest an aggregate of $5.0 million in convertible preferred stock, funded in three tranches, subject to definitive documentation. Proceeds are expected to be used for general working capital during the strategic transition, the satisfaction or discharge of existing liabilities, and transaction expenses, with any remaining proceeds returned to the Company's shareholders, subject to applicable legal requirements.
As part of the proposed investment, the Investor would seek to enable strategic initiatives designed to maximize shareholder value, including by making additional capital available. The Company's existing management team is expected to remain involved in overseeing and operating the existing business and providing support in connection with any subsequent strategic initiatives.
Sale of a Portion of the Operating Business
Separately, the Company, through its operating subsidiaries, has entered into a non-binding letter of intent to sell a portion of its operating business - comprising designated operating assets used in the Dot Ai business - to a strategic buyer (the "Buyer") for a purchase price of up to $6.0 million in cash, together with the assumption of approximately $3.0 million of related liabilities, subject to adjustment and definitive documentation. Importantly, the proposed transaction is structured as a sale of a portion of the Company's operating business, with the Company retaining certain operating units within the listed entity.
In connection with the letter of intent and subject to execution of definitive documentation and applicable lender consents, the Buyer would fund a $500,000 secured convertible note to support working capital and transaction-related expenses as a down payment in exchange for exclusivity throughout the term of the deal, and intends to retain and support the existing management team to accelerate commercialization and growth.