By Sheri Kasprzak
New York, Nov. 1 - DynTek, Inc. has reduced the conversion prices and deferred principal payments on two convertible notes.
The company will defer principal payments totaling $1,776,771 due through January 2007 on its 9% subordinated convertible notes. As of Oct. 31, the company owed $3.35 million under the 9% notes.
In exchange for the deferment, the conversion price of those notes was dropped to $0.22 from $0.65.
For the amendments, DynTek issued warrants for 491,400 shares, exercisable at $0.22 each.
Also, Dyntek deferred $831,249 in principal payments due from December 2005 through March 2006 on its $6.65 million secured convertible term note with Laurus Master Fund, Ltd.
The conversion price on that note was reduced to $0.25 from $0.65.
Also, Laurus received a five-year warrant for 1,046,150 shares, exercisable at $0.65 each.
"We believe that these measures comprise our first steps toward creating an appropriate balance sheet to sustain and grow our business," said Casper Zublin Jr., the company's chief executive officer, in a statement released Tuesday morning. "We also believe that our existing debt and cash payment obligations have acted as a detriment to our perceived and actual value."
Separately, DynTek raised $2.5 million from two secured promissory notes for $1.25 million in principal each.
The notes bear interest at 12% annually until March 1, 2006; 14% annually from March 2006 through April 1, 2006; 16% per year from April 1, 2006 through May 1, 2006; 18% from May 1, 2006 through June 1, 2006; and 20% from June 1, 2006 through maturity on Dec. 31, 2006.
The investors received warrants for 1 million shares, exercisable at a price equal to the greater of $0.10 each or the price per share at which the company's stock is sold in any rights offering to record holders of its stock. The warrants expire Oct. 26, 2015.
On Nov. 1, the company announced a common stock rights offering. It plans to distribute subscription rights to its shareholders of record at $0.10 each.
Based in Irvine, Calif., DynTek provides internet technology services to local governments, educational institutions and commercial entities.
| Issuer: | DynTek, Inc.
|
| Issue: | Promissory notes
|
| Amount: | $2.5 million
|
| Maturity: | Dec. 31, 2006
|
| Coupon: | 12% through March 1, 2006; 14% from March 2006 to April 1, 2006; 16% from April 1, 2006 to May 1, 2006; 18% from May 1, 2006 to June 1, 2006; and 20% from June 1, 2006 through maturity
|
| Warrants: | For 1 million shares
|
| Warrant expiration: | Oct. 26, 2015
|
| Warrant strike price: | The greater of $0.10 or the price per share at which the company's stock is sold in any rights offering
|
| Settlement date: | Oct. 26
|
| Stock price: | $0.18 at close Oct. 26
|
|
|
© 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.
