SpiralFrog, the ad-supported music service, has secured $2 million in funding through the private placement of Senior Secured Exchangeable Notes. The Notes bear an interest rate of 12% annually with interest due quarterly commencing on January 1st, 2008. All proceeds from the net profits of the deal will be used to acquire additional content and expand their operations.
Seeing as SpiralFrog's business plan seems to not be panning out (they lost over $3 million in the third quarter), and this has some bizarre scheme dealing with "Notes", and paying interest to some unnamed source, this should keep their doors open for a few more months. Considering the company "officially" launched in September of this year, it sounds like time might be running out for SpiralFrog to turn a profit.