Dear Dale: PHOENIX, June 2 /PRNewswire/ -- GumTech International, Inc. (Nasdaq: GUMM - news) announced today that it has completed a financing arrangement with Citadel Investment Group for $6 million in combined debt and preferred equity. The company plans to use the proceeds to support its Gel Tech LLC joint venture, to continue its development work on a nicotine gum, and as working capital for its gum manufacturing operations. Pursuant to this financing, Gum Tech issued $4 million in 8% Senior Secured Redeemable Notes and $2 million in Series A Preferred Stock.
William Hemelt, Gum Tech's Chief Financial Officer, said, ''We believe that this financing with Citadel results in as little dilution as possible to our current shareholders while at the same time providing the company with the resources necessary to move the Gel Tech and nicotine gum projects to the next stage.''
According to Hemelt, ''This arrangement allows us to repay the financing with cash from future profits, or common stock, whichever is in the best interests of shareholders in the future.''
Gary Kehoe, Gum Tech's President, said, ''We are very pleased to establish this relationship with Citadel. The company has come a long way in the last year and a half. This financing will enable us to accelerate our progress on a number of important projects, including our gel technology and continuing to make Gum Tech the leader in the development and manufacture of functional chewing gums.''
InterContinental Capital served as a facilitator in the transaction with Citadel Investment Group.
WHERE do you see the info to say one round of convertibles?? JDN |
