Fortune paying back $7.5 million convertible term loan

By Jennifer Chiou

New York, Dec. 8 - Fortune Industries, Inc. announced it is making principal payments on its $7.5 million convertible term loan with Laurus Master Fund, Ltd.

As of Nov. 1, the company said its payments thus far have reduced the convertible option by about 83,000 shares.

Fortune added that over a 12-month period, a reduction of about 496,000 diluted shares outstanding is expected if payments are in cash.

Under terms of the agreement, Laurus has the option to convert principal payments totaling 1,363,636 shares into common stock.

Fortune said it is using operating cash flows and its credit facility to fund the payments.

Interest on the Laurus note is at prime plus 3%, while Fortune's credit facility is at Libor plus 175 basis points.

"Principal payments on the Laurus note equate to a share buyback of our diluted common stock outstanding," chief executive officer John Fisbeck said in a news release.

"Reducing our outstanding Laurus note balance will assist us in reducing our financing costs and improve our diluted earnings per share as we continue to strengthen our financial position."

Based in Indianapolis, Fortune Industries is a technology-based service company involved in wireless infrastructure, business solutions, transportation infrastructure, ultraviolet technologies and electronics integration.

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