M-Wave converts $4.6 million in debt into preferreds, raises $1.9 million in new capital

By Sheri Kasprzak

New York, March 1 - M-Wave, Inc. said it has converted $4.6 million in secured and unsecured debt into shares of convertible preferred stock and has raised a $1.9 million in equity.

The debt had been held by M.A.G. Capital. The conversion eliminates $2.2 million in secured and $2.4 million in unsecured debt.

The debt was converted into series B preferreds. The preferreds are convertible into common shares at $0.79 each and pay annual dividends at either 15% or 9% depending upon when the company files a registration statement with the Securities and Exchange Commission.

Connected to the offering, M-Wave reduced the strike price of 2.1 million warrants issued to M.A.G. between July 2004 and June 2005. The warrants are now exercisable at $0.69 each, reduced from prices ranging between $1.02 and $1.27.

The recapitalization brings M-Wave back into compliance with Nasdaq listing rules. The company had previously not been in compliance with Nasdaq rules because it had less than $2.5 million in stockholder's equity.

No additional details about the $1.9 million in new capital raised could be determined by press time Wednesday.

"The new capital provides the company the resources it needs to achieve Nasdaq compliance, complete its restructuring, including the liquidation of its former satellite components division, and to become increasingly efficient in its core business," said Jim Mayer, the company's interim chief executive officer, in a statement.

Based in Franklin Park, Ill., M-Wave provides supply chain services and sources printed circuit boards, electronic parts and equipment domestically and from Asia.

On Wednesday, the company's stock gained 0.01% to close at $0.68 (Nasdaq: MWAV).

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