UOL Publishing, Inc. Raises $2.5 Million With Convertible Debentures
McLEAN, Va., June 23 /PRNewswire/ -- UOL Publishing, Inc. (Nasdaq: UOLP) announced today that it has raised $2.5 million in gross proceeds through a private placement of convertible debentures to B.H. Capital Investments, L.P. and Excalibur Limited Partnership, both located in Toronto, Canada. The net proceeds were used primarily to pay off $2 million of debt with the Company's existing bank lenders -- Imperial Bank and Sand Hill Capital.
"We are very pleased to have replaced UOLP's existing bank debt with the issuance of the recent debentures to B.H. Capital and Excalibur," said Nat Kannan, UOL Chairman and Chief Executive Officer. "The negotiated interest rates are more attractive for UOL, the term of 18 months gives UOL significant time to focus on building the company. We're very happy to have debenture holders who are strong proponents of the Company's future. We look forward to their growing participation as equity partners."
Under the terms of the debentures, interest will accrue at a rate of 9% per annum and the principal and accrued interest are due on December 15, 2000, if not sooner converted. In addition, commencing ninety days from the date of the agreement the holder may convert up to 15% of the original principal balance per month, on a cumulative basis, into Common Stock at a conversion price of $5.55 per share. The conversion price equals the average closing price of the Common Stock over the five trading days prior to the date of the agreement. If the market price of the Common Stock at the date of conversion is less than the conversion price, the Company shall have the option either to pay the holder in Common Stock at a fifteen percent discount to the market price or in cash in an amount equal to 110% of the principal amount to be converted (115% if conversion occurs after 210 days following the date of the agreement).
In connection with this agreement, the Company issued warrants to the investors to purchase a total of 112,600 shares of common stock at a price of $6.38 per share.
Cardinal Capital Management, Inc., of Atlanta, Ga. advised UOL on the transaction. |
