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Ashton Tech Seeks To Issue Stock To Meet Note Obligations
Updated: Tuesday, July 31, 2001 09:25 AM ET Email this article to a friend!
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WASHINGTON (Dow Jones)--Ashton Technology Group Inc. (ASTN, news, msgs) is seeking shareholder approval to authorize the issuance of a sufficient number of shares of common stock to allow the company to meet its obligations under a $5.1 million secured convertible note that was issued to RGC International Investors in exchange for the remaining shares of Series F convertible preferred stock, under a securities exchange agreement dated July 13.
Ashton is also seeking shareholder approval to authorize the issuance of an undetermined number of shares of common stock under a securities purchase agreement with Jameson Drive LLC, dated July 10, which provides for the sale by Ashton of up to $15 million worth of common stock, over a two-year period, and upon exercise of a stock purchase warrant dated July 10.
Should Ashton's stockholders fail to approve the first proposal, Ashton would be unable to issue shares of common stock upon conversion of the convertible note, causing an acceleration of the maturity date - to April 1, 2002, to Aug. 18, 2003 - of the convertible note.
Repayment of the convertible note is secured by certain of the intellectual property of Ashton, including its eVWAP trading system. If Ashton cannot repay the convertible note at maturity or upon acceleration, the collateral could be sold to a third party to obtain repayment of amounts owed by Ashton under the convertible note.
Ashton currently doesn't have sufficient cash, cash equivalents or securities to redeem the convertible note.
The terms of the securities purchase agreement with Jameson Drive allow Ashton to use the proceeds of the sales to Jameson to redeem the convertible note.
However, if Ashton is unable to draw on the $15 million securities purchase agreement with Jameson, Ashton's cash, cash equivalents, and securities will not be sufficient to repay the convertible note unless alternative financing is obtained.
Shareholders will be able to vote on the proposal at the company's annual meeting to be held Sept. 25.
Ashton Technology, via its units, offers consulting services and develops transaction security systems for online investing. The company is based in Philadelphia.
-Brian Coyle, Dow Jones Newswires; 202-628-7695 |
