Deal arranged with Notre-Dame Capital to fund general working capital
By Devika Patel
Knoxville, Tenn., Oct. 19 - Preo Software Inc. said it has negotiated a private placement of convertible debentures with Notre-Dame Capital Inc.
The C$2 million of convertible debentures have a two-year term and accrue interest at 10% per year. Interest is payable quarterly. The debenture may be converted into common shares at C$0.40 per share, a 90.48% premium to the Oct. 18 closing share price of C$0.21.
The debentures will automatically convert if the company's common shares trade at C$0.60 or higher for 30 trading days.
Notre-Dame will also receive 8% warrant coverage. Each warrant is exercisable at C$0.40 for two years, also a 90.48% premium to the Oct. 18 closing share price.
Proceeds will be used for general working capital purposes.
"The recent addition of Supplies Network, following on multi-year agreements signed with Xerox and Toshiba America Business Solutions, is clear indication that our channel distribution program is gaining significant momentum," company chief executive officer Gary McCone stated.
"This financing will solidify our ability to support these important relationships while being able to aggressively pursue new opportunities."
Based in Edmonton, Alta., Preo Software provides print management services.
| Issuer: | Preo Software Inc.
|
| Issue: | Convertible debentures
|
| Amount: | C$2 million
|
| Maturity: | Two years
|
| Coupon: | 10%
|
| Price: | Par
|
| Yield: | 10%
|
| Conversion price: | C$0.40
|
| Call: | If common shares trade at C$0.60 or higher for 30 trading days
|
| Warrants: | 8% coverage
|
| Warrant expiration: | Two years
|
| Warrant strike price: | C$0.40
|
| Investor: | Notre-Dame Capital Inc.
|
| Pricing date: | Oct. 19
|
| Stock symbol: | TSX Venture: PKM
|
| Stock price: | C$0.21 at close Oct. 18
|
| Market capitalization: | C$7.87 million
|
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