e-DOCS.net Receives $2,000,000 Private Placement from L&H
Thursday November 11, 6:04 pm Eastern Time
Company Press Release
e-DOCS.net Receives Private Placement of a $2,000,000 Convertible Secured Promissory Note
HOUSTON--(BW HealthWire)--Nov. 11, 1999--e-DOCS.net (OTCBB:EDOC - news) announced today the private placement of a $2,000,000 convertible secured promissory note (the ``Note'). Eric A. Black, president and chief executive officer of e-DOCS.net, stated, ``The proceeds of this private placement will enable e-DOCS.net to continue our business strategy, while we continue the process of positioning the Company for a long-term financing plan. In addition to working with our existing investors and new sources of capital to raise additional funds, we are also looking for strategic partners to provide financing. The continued funding and development initiatives are critical to the success of e-DOCS.net.'
Mr. Black continued, ``We will use the proceeds from the Note for general working capital purposes, to continue our recruiting and training efforts for additional transcriptionist classes and to make the initial payments for the expansion and development of our network and workflow management software which is necessary to support our sales growth. In addition to the $2,000,000, we have received a term sheet to provide an additional $2,000,000 for acquisitions, subject to the lender's approval of the terms and conditions of any such acquisitions.'
The Note, which is convertible into common stock at $.37 per share, bears interest at 12.5% and matures on February 3, 2000. The repayment of the Note is secured by substantially all of the Company's tangible and intangible assets. The Note was issued to Lernout & Hauspie Speech Products, N.V. The Note, if converted, would convert into 5,405,405 shares of common stock. The Company currently has 16,746,875 shares of common stock outstanding.
In addition to the private placement of the Note, the Company amended a $1,500,000 convertible promissory note held by the L&H Investment Co., N.V. (``LHIC'), to extend the maturity from November 24, 1999 to February 3, 2000. As consideration for the extension, the Company pledged substantially all of the Company's tangible and intangible assets as collateral for the promissory note and amended the conversion price to $.37 per share. Additionally, the issuance of the Note with a conversion rate of $.37 impacted the Series D Preferred Stock issued previously to LHIC in December 1998 and February 1999. The Series D Preferred Stock contains a price protection provision enabling LHIC to convert the Series D Preferred Stock at the $.37 per share conversion rate instead of the initial $1.50 per share conversion rate. This price protection provision will enable LHIC to obtain a substantial ownership share of the Company's common stock, should LHIC elect to convert. The $1,500,000 convertible promissory note, if converted, would convert into 4,054,054 shares of common stock and the Series D Preferred Stock, if converted, would convert into 13,513,513 shares of common stock.
In the event that the Company has insufficient shares of common stock to issue upon the conversion of the notes described above, the Company will issue Series F Preferred Stock. Series F Preferred Stock participates in dividends, voting rights and liquidation preference on par with common stock on an as-converted basis. |
