New Issue: WorldGate settles $11 million convertible debenture offering

By Sheri Kasprzak

New York, Aug. 14 - WorldGate Communications Inc. wrapped an $11 million private placement of convertible debentures.

Cornell Capital Partners, LP bought the 6% debentures. The debentures are due in three years and are convertible into common shares at the lesser of $1.75 each or 90% of the volume weighted average price of the company's stock for a set period before conversion.

Cornell will receive five-year warrants for 2,595,000 shares. Of the warrants, 1,145,000 are exercisable at $1.85 each, 1.1 million at $2.35 each and 350,000 at $2.60 each.

WorldGate, based in Trevose, Pa., designs personal video phones.

Issuer:	WorldGate Communications Inc.
Issue:	Convertible debentures
Amount:	$11 million
Maturity:	Three years
Coupon:	6%
Price:	Par
Yield:	6%
Conversion price:	The lesser of $1.75 or 90% of the VWAP over a set period before conversion
Warrants:	For 2,595,000 shares
Warrant expiration:	Five years
Warrant strike price:	$1.85 for 1,145,000 shares; $2.35 for 1.1 million shares; $2.60 for 350,000 shares
Investor:	Cornell Capital Partners, LP
Settlement date:	Aug. 14
Stock symbol:	Nasdaq: WGAT
Stock price:	$1.27 at close Aug. 14

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