PrivCo -- LIVINGSOCIAL Receives Emergency $110M Debt Infusion From Existing Investors With Oppressive Terms

Thu Feb 21, 2013 6:00am EST

* Reuters is not responsible for the content in this press release.

  NEW YORK, NY, Feb 21 (Marketwire) -- 
LivingSocial has just received $110 million in emergency financing from
some of its existing investors today, in a last ditch attempt to save the
privately-held daily deals company from imminent financial ruin, PrivCo
has confirmed exclusively, until the company can be sold by year's end to
recoup whatever is still possible.

    PrivCo exclusively confirmed the terms of the distressed financing (which
was NOT a "new VC round" as has been widely misreported) with both a
senior executive at LivingSocial familiar with the transaction, as well
as a current LivingSocial venture capital investor participating in the
new emergency debt financing.

    Distressed Financing Included The Following Onerous Terms (PrivCo
Exclusive):


--  LIVINGSOCIAL Issued A New Complex Class of Convertible Debt
    Securities, Convertible Into a New Class of Preferred Stock With More
    New Preferences -- EQUITY or stock was NOT issued as widely
    misreported
--  "Super liquidation preferences" of several times the $110 Million in
    debt
--  A large issuance of "Super-Warrants" for still more shares in
    LivingSocial attached to the Secured Convertible Debt
--  Double-digit annual cash dividends to be paid by LivingSocial
--  Re-pricing of participating investors' previous rounds

    

PrivCo's Hamadeh concluded: "LivingSocial's issuance of this onerous
emergency debt financing effectively means that its most recent investors
entirely control the equity of the company. LivingSocial essentially
threw itself at the mercy of its investors -- who had already sunk over
$823 million in the company before today's $110 million additional
lifeline -- to avoid a total collapse of the company that would have
occurred within days. Regardless, this will likely be LivingSocial's --
and the daily deals bubble's -- final gasp."

    To access PrivCo's Exclusive Reporting On LivingSocial's Emergency
Financing:

   
http://www.privco.com/livingsocial-receives-emergency-110m-cash-infusion-from-ex
sting-investors-to-avoid-bankruptcy

    About PrivCo

    Based in New York, PrivCo is the leading provider of private company
financial data and business research. PrivCo publishes exclusive
financial data on over 168,000 private companies, as well as over 51,000
private company deal details, including private company mergers &
acquisitions, private equity and venture capital investments, leveraged
buyouts, pre-IPO activity, restructurings, and more.

    

Media Contact:
Sam Hamadeh
PrivCo CEO
(917)-701-1887
Sam@privco.com 

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