By Jennifer Chiou
New York, Dec. 5 - Guided Therapeutics, Inc. entered into a note purchase agreement on Monday with 28 existing and new lenders, under which it will issue $2.3 million of 15% subordinated secured convertible notes due Dec. 1, 2011 and warrants exercisable for 1,558,878 common shares, according to an 8-K filing with the Securities and Exchange Commission.
The convertible notes will be subordinated to the existing senior secured obligations of the company, which are secured by (a) a first-priority lien on all of its assets; (b) a guaranty by the company's wholly owned subsidiary, InterScan, Inc.; (c) a lien on all of InterScan's assets; and (d) a pledge on all issued and outstanding stock of the Guided and InterScan.
No payments will be due under the convertibles until they mature.
In the event of default, the interest rate on the convertibles increases to 20%.
The notes will be convertible into 3,556,580 shares for a conversion rate of $0.65 per share.
The warrants will be immediately exercisable for 11,558,878 shares at an exercise price of $0.65 per share.
Guided added that about $1.1 million of the proceeds will be used to convert existing debt into convertible notes and $200,000 will be used to retire debt from previous loans.
Remaining proceeds will be used for working capital and other corporate purposes.
The company also said that the $400,000 unsecured notes issued to Dolores Maloof on April 10, 2008, plus interest, as will $625,000 of notes held by Ressler & Tesh, PLLC, Richard Blumberg and designated investors, George Goll, Jill T. Gentile, Gregory S. Petrie, Mark E. Brennan & Maureen C. Brennan, Jt. Tenants WROS, Michael Moore, Benny H. Screws, the Sternfeld Family Trust, Peter L. Reininger, John C. Imhoff and J.E. Funderburke.
The lenders include John E. Imhoff, William Zachary, Jr. Michael C. James, Dr. Ronald W. Hart, Ronald W. Allen, and all directors of the company, who collectively own about 28% of the company's stock.
The company is based in Norcross, Ga.
| Issuer: | Guided Therapeutics, Inc.
|
| Issue: | Subordinated secured convertible notes
|
| Amount: | $2.3 million
|
| Maturity: | Dec. 1, 2011
|
| Coupon: | 15%
|
| Conversion price: | $0.65
|
| Conversion ratio: | Into 3,556,580 shares
|
| Warrants: | For 1,558,878 shares
|
| Warrant strike price: | $0.65
|
| Pricing date: | Dec. 1
|
| Stock symbol: | Pink Sheets: GTHP
|
| Stock price: | $0.40 at close Dec. 1
|
| Market capitalization: | $5.4 million
|
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