Company Simultaneously Refinances Debt at Substantially Lower Cost of Capital
NEW YORK, NY / ACCESSWIRE / December 10, 2018 / uSell.com (OTCQB: USEL), a large market maker of used smartphones, announced today the signing of a contract to license its online platform to Brightstar, one of the largest service providers to the connected device industry. The Company simultaneously raised $4.8 million in 5% convertible notes and refinanced its debt with a new senior lender at a substantially lower cost of capital.
A significant portion of the $4.8 million financing was done by existing shareholders, including an investment of $1.2 million from Sunder Raman, the father of Chief Executive Officer Nik Raman, and a $180,000 investment from one of the Directors of the Company. As a result of uSell's streamlined capital structure, the Company expects to save roughly $70,000 per month in interest expense, a roughly 85% savings compared to previous levels.
Nik Raman, Chief Executive Officer, commented, ''The simultaneous closing of a technology licensing deal with one of the largest industry participants, an infusion of capital from our largest shareholders, and the refinancing of our debt with a new lender represents a major milestone for the Company. Not only have we substantially improved our capital structure, but we have also validated the relevance of our technology in the rapidly evolving market for used smartphones. These deals mark our transformation from a capital intensive, low margin model to an asset-light, technology-driven, high margin model.''
As a part of the agreement, uSell has incorporated a new entity, PhoneX Inc., and has transferred to this new subsidiary all of its technology assets related to the online, wholesale distribution of used smartphones. Brightstar will have largely exclusive rights to use the platform, with the exception of We Cell Cellular, which will be permitted to continue to use the platform to sell devices acquired from alternative suppliers.
''This deal marks the culmination of three years of groundwork that we have laid since the acquisition of We Sell Cellular,'' said Raman. ''We are now in a position to realize our vision of becoming the dominant industry platform for the exchange of used smartphones.''
About uSell.com, Inc.
uSell.com, Inc. is a large market maker of used smartphones. uSell acquires products from both individual consumers, on its website, uSell.com, and from major carriers, big box retailers, and manufacturers through its subsidiary, We Sell Cellular, LLC. The Company maximizes the value of these devices by reclassifying them, adding value to them, and moving them throughout the world to those who want them most. In order to serve its global and highly diverse customer base, uSell leverages both a traditional sales force and an online marketplace where professional buyers of used smartphones can buy inventory on-demand. Through participation on uSell's online platform and through interaction with uSell's salesforce, buyers can acquire high volumes of inventory in a cost effective manner, while minimizing risk.
This press release includes forward-looking statements including statements regarding our expected interest savings and the potential of the Company's Platform. The words ''believe,'' ''may,'' ''estimate,'' ''continue,'' ''anticipate,'' ''intend,'' ''should,'' ''plan,'' ''could,'' ''target,'' ''potential,'' ''is likely,'' ''will,'' ''expect'' and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. The results anticipated by any or all of these forward-looking statements might not occur. Important factors that could cause actual results to differ from those in the forward-looking statements include unanticipated difficulties in integrating new users to the Platform and the effectiveness of the Platform. Further information on our risk factors is contained in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2017. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.
Chief Executive Officer
SOURCE: uSell.com, Inc.