Navarre Corporation Enters Into Agreement for $20 Million Private Offering of Convertible Preferred Stock Units
MINNEAPOLIS--(BUSINESS WIRE)--April 22, 1998--Navarre Corporation (Nasdaq:NAVR - news), a leading national distributor of music, computer software and interactive CD-ROM products, announced today that it has entered into an agreement for the private placement of $20 million of convertible preferred stock units. The private placement is scheduled to close on or about May 1 after the termination of a 10-day notification period to existing shareholders, as required by Nasdaq, and is subject to customary closing conditions.
Eric Paulson, Navarre's chairman and chief executive officer, said, ''The capital provided by this private placement significantly enhances Navarre's financial foundation to support our future growth. The infusion of capital was absolutely necessary for Navarre to take advantage of the many business opportunities that we see in both music and computer software. We believe that with our strengthened financial position, Navarre can substantially increase revenues over the next three years.''
Paulson said that Navarre will use a portion of the approximately $19 million in net proceeds to build music inventories to serve new customer needs. ''We have recently signed distribution agreements on two new record labels, and see additional opportunities to support the growth of our music business,'' Paulson said. ''In addition, a portion of the net proceeds will enable the continued funding of our NetRadio subsidiary, while the company considers external funding opportunities.''
The convertible preferred stock unit is priced at $13.125 per share, is convertible into five shares of Navarre common stock after June 30, 1998, and includes a warrant to purchase five shares of Navarre common stock at $3.50 per share. The terms of the private placement were negotiated with investors in March 1998 and pricing was based on the price during the week of March 30, 1998. The company has been in the process of complying with Nasdaq requirements since this date and received approval from Nasdaq yesterday, subject to the Nasdaq shareholder notification requirement.
About Navarre Corporation
Navarre Corporation is a major publisher and distributor of quality consumer software and
This stock is will be watered down big time. They are giving away the farm to get this money. |
