Company no longer plans to sell $6 million of preferreds in offering
By Devika Patel
Knoxville, Tenn., Sept. 11 - National Holdings Corp. said it settled a $2 million tranche of a $6 million private placement of notes on Sept. 5. The deal, which priced on March 30, was originally to consist of $6 million in series E convertible subordinated debt and $6 million of series E preferred stock. The second $6 million tranche of preferreds will no longer settle, the company said in an 8-K filed Tuesday with the Securities and Exchange Commission.
The company issued $3.3 million of notes on March 30, $700,000 of notes on April 4 and $2 million of notes in the latest tranche.
Of the debt, $5 million was issued as 6% convertible subordinated promissory notes to National Securities Growth Partners LLC. The notes may be put after Dec. 31, 2012 and are due on March 31, 2015.
Each note is convertible into units of one series E preferred and a five-year warrant exercisable into an equal number of shares into which the preferreds are convertible.
Each preferred is convertible into 100 common shares at an initial conversion price of $0.50 per share. The warrants are exercisable at $0.50.The strike price for the warrants and conversion price of the preferreds is a 35.14% premium to the closing price on March 27, $0.37.
The remaining $1 million of debt was issued to director Bryant Riley in the form of a 10% subordinated promissory note.
Proceeds from the first note were used to repay the $3 million 10% senior subordinated convertible promissory note held by affiliates of St. Cloud Partners, LP. The remaining proceeds will be used for general corporate purposes.
New York-based National Holdings is the holding company for National Securities Corp., National Insurance Corp. and National Holdings Mortgage Corp.
| Issuer: | National Holdings Corp.
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| Issue: | Convertible subordinated promissory notes, subordinated promissory note
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| Amount: | $6 million
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| Maturity: | March 31, 2015
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| Coupon: | 6%
|
| Put: | After Dec. 31, 2012
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| Investors: | National Securities Growth Partners, LLC (for $5 million), Bryant Riley (for $1 million)
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| Pricing date: | March 30
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| Settlement dates: | March 30 (for $3.3 million), April 4 (for $700,000), Sept. 7 (for $2 million)
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| Stock symbol: | OTCBB: NHLD
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| Stock price: | $0.37 at close on March 27
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| Market capitalization: | $9.54 million
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|
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| Convertibles
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| Amount: | $5 million
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| Maturity: | March 31, 2015
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| Coupon: | 6%
|
| Put: | After Dec. 31, 2012
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|
|
| Notes
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| Amount: | $1 million
|
| Coupon: | 10%
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