5 September 2022
NUBURU raises $5m in convertible promissory notes to provide capital to invest in business
NUBURU Inc of Centennial, CO, USA (which was founded in 2015 and specializes in high-power, high-brightness blue lasers for 3D printing and industrial applications) has issued over $5m of convertible promissory notes and completed several milestones related to its business combination (announced on 8 August) with special-purpose acquisition company Tailwind Acquisition Corp.
The company notes provide immediate funding, which NUBURU intends to use to maintain its investment in its next-generation extreme-brightness AI laser product line and to pursue new technology development. Steps taken to build on the positive momentum of the proposed business combination transaction with TWND include adding a key capital markets advisor and completing significant diligence processes.
“Tailwind has completed its diligence, which was the final diligence-related milestone that could have triggered termination of the business combination,” says NUBURU’s CEO, co-founder & president Dr Mark Zediker. “As a result, we’ve removed a potential gating item to our merger and eliminated key conditionality relating to the business combination,” he adds.
“In light of this successful financing, the previously announced funding agreement for up to $100m, and the absence of a minimum cash condition in our transaction, we remain excited about the opportunity this deal provides to both sets of stockholders,” says TWND’s CEO & director Chris Hollod. “We are continuing our positive momentum towards closing this deal in first-quarter 2023 [subject to stockholder approval and other customary closing conditions].”
The company notes will convert into shares of NUBURU common stock immediately prior to, and subject to the occurrence of, the closing of the business combination, which common stock will convert into common stock of the combined company at the closing of the business combination. As holders of common stock of the combined company, the former holders of company notes would also be eligible to receive shares of Series A preferred stock of the combined company on the same terms as the TWND public stockholders. The conversion price is subject to an initial valuation cap of $350m for Nuburu as a private company.
If the upcoming extension proposal is approved by TWND’s stockholders at TWND’s 7 September extension vote meeting, TWND’s sponsor (or one or more of its affiliates, members or third-party designees) has agreed to provide an incremental contribution to its trust account. For the initial four-month extension ending on 9 January 2023, TWND will contribute the lesser of $500,000 and $0.25 per share of common stock not redeemed in connection with the extension. For each of the two subsequent one-month extensions required to close the business combination, TWND will contribute the lesser of $50,000 and $0.025 per share of common stock not redeemed in connection with the extension.
Based on the combined anticipated financing sources including TWND’s cash in trust (following redemptions), the preferred share structure designed to incentivize non-redemptions and the Lincoln Park Capital funding agreement for up to $100m (subject to the closing of the transaction and other conditions set forth in the purchase agreement entered into between TWND, NUBURU and Lincoln Park Capital), the proposed transaction has no minimum cash requirement for closing.