VitaCube Systems Holdings, Inc. Raises $2.3 Million in Private Placement

DENVER, Apr 01, 2004 (PRIMEZONE via COMTEX) -- VitaCube Systems Holdings, Inc. (VCBE) , a high-end nutritional supplement company, announced that effective March 31, 2004, the Company completed an initial closing of a minimum $2.3 million private placement. The Company sold 7,689,750 shares of its common stock for an aggregate cash purchase price of $2,306,924. A final closing is expected in mid-April. The Company intends to use the proceeds from the offering to initiate and advance its newly launched Network Marketing division and for working capital and general corporate purposes.

MDB Capital Group LLC ("MDB") acted as placement agent and our investment banker in connection with the financing. MDB received no cash consideration, but received reimbursement of its actual out of pocket costs and a warrant to purchase shares of common stock at the same price as the private placement shares. The amount of shares subject to the warrant will be determined at the time of the final closing. MDB's principals have substantial experience in assisting public network marketing companies and MDB will continue to act as investment banker to VitaCube.

In connection with the closing of the private placement, the Company's two founders agreed to convert $2,086,629 (including accrued but unpaid interest) of subordinated notes and a bridge loan into 6,955,430 shares of the Company's stock. In addition another creditor agreed to convert $100,000 of debt into 333,333 shares of the Company's common stock. The effect of the initial closing and the conversion of the debt into equity was to increase the Company's capital by over $4,300,000, reduce the Company's total debt to under $700,000 of trade payable, and increase the Company's cash position by approximately $2,300,000.

"We're thrilled to have cleaned up our balance sheet and secured this new round of funding, providing the Company with necessary capital to execute our plan of making VitaCube a leader in the health and wellness industry," said Sanford Greenberg, VitaCube's President and Chief Executive Officer. "This transaction will give current and prospective distributors further confidence in the VitaCube brand."

Anthony DiGiandomenico, Partner of MDB, commented, "We are pleased to bring our years of experience in working with and assisting public network marketing companies to VitaCube. We feel they are well positioned to launch their networking platform in April and look forward to working with them on the execution of their business model."

SIAR Capital, an independent investment fund that invests primarily in emerging growth companies invested in the private placement. Jack Silver of SIAR Capital commented, "We concluded after due diligence on VitaCube that it has the strategy, management, and market opportunity to be successful. We are excited to have invested in VitaCube.

"We are pleased with the confidence demonstrated by this investment," said Mr. Greenberg. "We are looking forward to working with SIAR Capital and our other new investors."

VitaCube Systems Holdings, Inc., is a provider of high quality meal replacement powder and premium nutritional dietary supplements. The Company's commitment to product integrity and the health needs of its customers has earned VitaCube a loyal following of over 350 world-class athletes that include:

-- Two Time World Champion Denver Broncos coach Mike Shanahan

-- 2001 World Series Co-MVP Curt Schilling, pitcher for the
Boston Red Sox

-- 4-Time Cy Young Award Winner, Randy Johnson, pitcher for
the Arizona Diamondbacks

-- Tampa Bay All-Pro quarterback Brian Griese

-- 2002 Olympic snowboard bronze medallist J.J. Thomas

-- Los Angeles Dodgers home run leader and First Baseman
for the Oakland A's Eric Karros

This release contains forward-looking statements regarding the Company's future plans, operations and prospects. The Company's actual results could differ materially from the results anticipated in these forward looking statements as a result of uncertainties, including risks relating to the amount of funding actually received at the final closing, the success of our network marketing division, demand for our products, pricing, competition, our distributors, government regulation, and other factors identified in the Company's filings with the Securities and Exchange Commission. Certain statements in this release regarding the Company's agreements are in accordance with the guidelines established by the Federal Trade Commission for endorsements in advertising.

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