Funds used to repay $1.2 million of 10% convertible held by St. Cloud
By Devika Patel
Knoxville, Tenn., July 25 - National Holdings Corp. said it increased a private placement to $12 million from $10 million. The deal, which priced on March 30, will now consist of $6 million in series E convertible subordinated debt and $6 million of series E preferred stock. The offering originally was to sell $4 million of debt.
The debt was issued as 6% convertible subordinated promissory notes. The company raised $3.3 million on March 30 and $700,000 on April 4. The notes may be put after Dec. 31, 2012 and are due on March 31, 2015.
Each note is convertible into units of one series E preferred and a five-year warrant exercisable into an equal number of shares into which the preferreds are convertible. The warrants are exercisable at $0.50.
The company sold 120,000 preferreds at $50.00 per preferred in the second tranche, which also included warrants for a total of 12 million shares. These five-year warrants are also each exercisable at $0.50.
Each preferred is convertible into 100 common shares at an initial conversion price of $0.50 per share.
The strike price for the warrants and conversion price of the preferreds is a 35.14% premium to the closing price on March 27, $0.37.
The investing group, National Securities Growth Partners, LLC, consists of Robert Fagenson, Bryant Riley, Mark Klein and Starfish Capital LLC.
Proceeds from the first note were used to repay the $3 million 10% senior subordinated convertible promissory note held by affiliates of St. Cloud Partners, LP. The remaining proceeds from the March notes and preferreds were used for general corporate purposes. The company will use the additional $2 million in proceeds to pay off $1.2 million of the $3 million 10% senior subordinated convertible promissory note held by St. Cloud Capital Partners II, LP, leaving a balance of $1.8 million with a maturity date that will be extended to Jan. 31, 2013.
New York-based National Holdings is the holding company for National Securities Corp., National Insurance Corp. and National Holdings Mortgage Corp.
| Issuer: | National Holdings Corp.
|
| Issue: | Series E convertible subordinated promissory notes, series E preferred stock
|
| Amount: | $12 million
|
| Investors: | National Securities Growth Partners, LLC (Robert Fagenson, Bryant Riley, Mark Klein and Starfish Capital LLC)
|
| Pricing date: | March 30
|
| Upsized: | July 25
|
| Stock symbol: | OTCBB: NHLD
|
| Stock price: | $0.37 at close on March 27
|
| Market capitalization: | $3.21 million
|
|
|
| Notes
|
| Amount: | $6 million
|
| Maturity: | March 31, 2015
|
| Coupon: | 6%
|
| Put: | After Dec. 31, 2012
|
| Settlement dates: | March 30 (for $3.3 million), April 4 (for $700,000)
|
|
|
| Preferreds
|
| Amount: | $6 million
|
| Preferreds: | 120,000
|
| Price: | $50.00
|
| Conversion price: | $0.50
|
| Conversion ratio: | Into 100 common shares
|
| Warrants: | For 12 million shares
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.50
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
