By Sheri Kasprzak
New York, July 15 - Napier Environmental Technologies Inc. said it has raised $5 million in loans to satisfy all liabilities to creditors.
The company received $1.5 million in term loans and $3.5 million in revolving loans.
The loans bear interest at Prime rate plus 1,000 basis points and mature in 364 days.
The maturity of the term loans may be extended, under certain circumstances, to four years. The maturity of the revolving loans may be extended by an additional 364 days.
The investors will also received warrants equal to up to 60% of Napier's shares and exercisable at a penny each through Aug. 31, 2010. When the warrants are granted, the interest rate on the loans will change to Prime rate plus 200 basis points.
According to a statement released by Napier, the company's board of directors has determined that the company is "in serious financial difficulty" and that the offering will improve the company's financial situation.
The funds not used to pay existing creditors will be used for working capital.
In other news, Napier said Steve Balmer, Anthony Traub and Marc Mercier have been appointed to its board of directors, replacing the resigning Lionel Dodd, Sue Anne Linde and Peter Jeffrey.
Based in Vancouver, B.C., Napier develops surface preparation products for stripping paint and coatings on wood.
| Issuer: | Napier Environmental Technologies Inc.
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| Issue: | Revolving and term loans
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| Amount: | $5 million ($3.5 million revolving; $1.5 million term)
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| Maturity: | 364 days
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| Coupon: | Prime rate plus 1,000 basis points
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| Warrants: | For up to 60% of Napier's shares
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| Warrant expiration: | Aug. 31, 2010
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| Warrant strike price: | $0.01
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| Settlement date: | July 15
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| Stock price: | $0.011 at close July 14
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