NEW YORK, NY / ACCESSWIRE / January 23, 2017 / uSell.com (OTCQB: USEL), a technology driven company focused on extracting the maximum value from used mobile devices, announced today that it has entered into a series of agreements with a new institutional investor, giving uSell.com more flexibility and increased capital to purchase inventory and further grow its business.
The new 3-year credit facility of $8,660,000 replaces the Company’s prior credit facility. The proceeds of the new facility were used to pay off the $8,140,000 that was outstanding and to pay closing costs and fees.
In addition, the new investor and uSell.com created a new special purpose entity (“SPE”) with equity funding from the investor in the amount of $5,200,000. uSell will act as a service provider to the SPE, offering the service of buying smartphones from major carrier and retailer trade in programs, triaging these devices, and then selling them to its global customer base. The SPE will absorb all of the direct costs associated with inventory purchased through the vehicle, as well as any associated selling expenses. The profits generated from the entity will then be distributed to uSell and the investor according to a predetermined schedule. To avoid conflicts, the Service Agreement permits uSell to first use the new credit facility to purchase inventory for its own account before using the SPE capital to purchase additional inventory.
Nik Raman, Chief Executive Officer, stated, “We are excited to have a new financing partner that will enable us to further scale our business. With the additional capital, we can continue to solidify our position as a leader within the used smartphone industry. Given that the industry is valued at $17B and is growing at 50% per year, it was essential for us to partner with an institutional investor that we can scale with. We now have all of the tools that we need to execute our business plan.”
While the formation of the SPE dramatically increases uSell’s purchasing power, it does not dilute existing shareholders or further leverage the company. The size of the SPE can be increased upon agreement of both parties.
