China Information Technology amends terms of $5 million loan with CEO

Loan, previously not convertible, may be converted to 1,851,852 shares

By Devika Patel

Knoxville, Tenn., Aug. 16 - China Information Technology, Inc. said it amended a $5 million loan.

The loan was negotiated in March 2010 with company chairman and chief executive officer Jiang Huai Lin as part of a $6 million note and was not convertible into the company's common stock. The company repaid $1 million of the note in April 2010, resulting in a $5 million balance under the note.

The revised agreement allows the loan's repayment to be converted into shares. The loan will be converted into 1,851,852 common shares at a conversion price of $2.70 per share, which is an 86.21% premium to the Aug. 15 closing share price (Nasdaq: CNIT) of $1.45.

"Given my confidence in the long-term growth outlook for the company, the company and I have approved the amendment to the loan's repayment terms," Lin said in a press release. "The amendment allows for greater flexibility with our company's current cash balance, while the premium price on the newly converted shares serves to lessen the dilution to shareholders that would have otherwise occurred if the loan were converted at the current market price. Looking ahead, we will continue to manage the company's cash prudently and in the best interests of our company and our shareholders, while remaining focused on executing our core business strategies."

The Shenzhen, China, company is a provider of information technologies and display technologies.

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