By Sheri Kasprzak
New York, Aug. 11 - Global Concepts Ltd. said it has received a $5 million equity line from Cornell Capital Partners, LP and also sold $2.5 million in convertible debentures to Cornell.
Under the terms of the standby equity distribution agreement, Cornell may buy shares of Global Concepts over two years at 95% of the lowest daily volume-weighted average price during the five trading days following a draw request.
There is a $250,000 limit on each demand, and the company may not draw from the line more than once every five trading days.
Cornell also bought a $2.5 million secured convertible debenture for cash proceeds of $1.8 million. The debenture, priced at 72, has a stated interest rate of 12% annually, matures on Feb. 1, 2007 and is convertible into common shares at $0.20 each. For the debenture, Cornell paid $1.8 million in cash and surrendered a $1.5 million promissory note issued by Global Concepts in January. Because only $1.8 million in cash was paid for the note, the actual interest rate will exceed 36%.
Cornell also received warrants for up to 5 million shares, exercisable at $0.25 each for three years.
Based in Montclair, N.J., Global Concepts prepares new cars for delivery.
Equity agreement
| Issuer: | Global Concepts Ltd.
|
| Issue: | Standby equity distribution agreement
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| Amount: | $5 million
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| Price: | 95% of the lowest daily volume-weighted average price during the five trading days after draw request
|
| Tenor: | Two years
|
| Warrants: | No
|
| Investor: | Cornell Capital Partners, LP
|
| Settlement date: | Aug. 4
|
| Stock price: | $0.20 at close Aug. 4
|
|
|
| Convertible debentures
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| Issuer: | Global Concepts Ltd.
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| Issue: | Convertible debentures
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| Amount: | $2.5 million
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| Proceeds: | $1.8 million
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| Maturity: | Feb. 1, 2007
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| Coupon: | 12% (stated); 36% (actual)
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| Price: | 72
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| Conversion price: | $0.20
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| Warrants: | For 5 million shares
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| Warrant expiration: | Three years
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| Warrant strike price: | $0.25
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| Investor: | Cornell Capital Partners, LP
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| Settlement date: | Aug. 4
|
| Stock price: | $0.20 at close Aug. 4
|
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