New York, June 15 - Island Pacific, Inc. said it has agreed to sell $4.2 million of secured term convertible notes to Laurus Master Fund, Ltd. and Midsummer Investments, Ltd.
The investors will also receive warrants for 5,833,333 shares of common stock with an exercise price of $0.23 per share and options for 22,500,000 shares of commons stock with an exercise price of $0.01 per share.
The three-year notes convert at $0.18 per share and pay interest at prime plus 100 basis points.
Island Pacific can pay interest and principal in cash or stock at its option.
The Irvine, Calif., provider of software to the retail industry will use $2.5 million of the proceeds to repay the secured term note issued on April 18 and the remainder for working capital and other purposes.
The financing is part of a plan intended to achieve profitability in the second half of the year and "vastly improve" the company's balance sheet by March 31, 2006.
| Issuer: | Island Pacific, Inc.
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| Issue: | Secured term convertible notes
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| Amount: | $4.2 million
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| Maturity: | Three years
|
| Coupon: | Prime + 100 bps
|
| Conversion price: | $0.18
|
| Call: | At any time at 125% of par
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| Warrants: | For 5,833,333 shares
|
| Warrant exercise price: | $0.23
|
| Warrant term: | Seven years
|
| Options: | For 22,500,000 shares
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| Option exercise price: | $0.01
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| Option term: | 10 years
|
| Investors: | Laurus Master Fund, Ltd., Midsummer Investments, Ltd.
|
| Announcement date: | June 15
|
| Stock price: | $0.21 at close June 15
|
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