Company also arranges $10 million financing to replace credit facility
By Devika Patel
Knoxville, Tenn., March 10 – Local Corp. completed a $4.57 million private placement of senior convertible notes and $4.75 million of partially liquidating debentures in a registered offering on March 9, according to an 8-K filed Tuesday with the Securities and Exchange Commission.
The 8% notes are due on April 11, 2018 and will initially convert to common shares at $0.5534 per share.
The 10% debentures are due Aug. 1, 2016 and are initially convertible at $0.7090 per share.
In addition, investors received 50% warrant coverage, or warrants for 7,708,091 shares. The warrants are each exercisable at $0.6510 for five years.
The conversion prices and strike price are a 12.16% discount, 12.54% premium and 3.33% premium to the March 6 closing share price of $0.63.
Proceeds will be used to repay the company’s 7% convertible notes, which are due in April.
In connection with the placement, the company negotiated a $10 million secured accounts receivable financing agreement with Fast Pay Partners LLC that matures in April 2016. This financing is expected to replace the company’s senior secured facility with Square 1 Bank.
Based in Irvine, Calif., Local operates a local media advertising company that enables local businesses and consumers to find each other and connect.
| Issuer: | Local Corp.
|
| Issue: | Senior convertible notes, partially liquidating debentures
|
| Amount: | $9,318,056
|
| Warrants: | 50% coverage (for 7,708,091 shares)
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.6510
|
| Settlement date: | March 9
|
| Stock symbol: | Nasdaq: LOCM
|
| Stock price: | $0.63 at close March 6
|
| Market capitalization: | $14.91 million
|
|
|
| Notes
|
| Amount: | $4,568,056
|
| Maturity: | April 11, 2018
|
| Coupon: | 8%
|
| Conversion price: | $0.5534
|
|
|
| Debentures
|
| Amount: | $4.75 million
|
| Maturity: | Aug. 1, 2016
|
| Coupon: | 10%
|
| Conversion price: | $0.7090
|
|
|
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