National Holdings secures 195-day extension on $3 million convertible

Company enters agreement with National Securities, St. Cloud Capital

By Susanna Moon

Chicago, July 23 - National Holdings Corp. obtained a 195-day payment extension on its $3 million senior subordinated convertible promissory note to Jan. 31, 2013 from June 30.

The company entered into a letter agreement with National Securities Growth Partners, LLC and St. Cloud Capital Partners II, LP on July 17, according to an 8-K filing with the Securities and Exchange Commission.

Under the terms, St. Cloud will receive a $1.2 million payment on the note, and the company will grant St. Cloud a general security interest in assets of the company.

The company will receive a $2 million investment, a portion of which will be used to pay St. Cloud and the remainder will be used for working capital purposes.

In addition, National Securities agreed to extend the term of its 6% subordinated convertible promissory note so that the variance of the maturity date with that of the note is always six months, the filing noted.

New York-based National Holdings is the holding company for National Securities Corp., National Insurance Corp. and National Holdings Mortgage Corp.

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