Homeland Security forbearance agreement expires; lender may foreclose

YA Global is owed $18.36 million after company defaults on its debt

By Devika Patel

Knoxville, Tenn., Sept. 21 - Homeland Security Capital Corp. reported that its forbearance agreement with investor YA Global Investments, LP expired on Sept. 14 in an 8-K filed Wednesday with the Securities and Exchange Commission. The agreement was negotiated on July 29 and was extended on Sept. 7.

Under the agreement, YA Global had agreed to forbear from exercising its rights in regard to a default that may have occurred when the company failed to pay the principal and interest due on its $14.19 million of debt at maturity. With interest, the company owes the investor $18.36 million.

As of Sept. 15, the lender may foreclose without notice, but it has not indicated that intends to foreclose on the company's assets.

The parties are in discussions and may either extend the forbearance period or renegotiate the debt's terms.

Based in Arlington, Va., Homeland Security invests in homeland security companies.

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