By Sheri Kasprzak
New York, July 28 - Naturade Inc. said it has completed a private placement of preferred stock for $21 million.
The company sold a total of 21 million shares of series C convertible preferred stock to Quincy Investments Corp., Health Holdings and Botanicals LLC and Westgate Equity Partners, LP at $1.00 each.
The preferreds are initially convertible into one common share at $1.00 each and pay annual dividends equal to 20% of the amount by which the company's pretax profits for the year exceed $10 million.
Quincy also received 30,972,345 common shares at a price per share that could not be determined by press time Thursday.
The investors all received warrants for a total of 24 million shares, exercisable at $1.00 each through July 22, 2006.
In exchange for the preferreds, Health Holdings cancelled 41,054,267 common shares and Westgate cancelled 13,540,723 series B preferreds.
Naturade may force conversion of the preferreds if its stock exceeds $1.50 per share for more than 20 consecutive trading days. The preferreds will automatically convert after July 22, 2006. The preferreds are redeemable after Dec. 31, 2012 at $1.00 each plus accrued dividends.
The proceeds raised from the preferred and common shares sold to Quincy will be used to finance Naturade's acquisition of Ageless Foundation Inc., Symco Inc. and Symbiotics Inc.
Based in Irvine, Calif., Naturade produces health supplements.
| Issuer: | Naturade Inc.
|
| Issue: | Convertible preferred stock
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| Amount: | $21 million
|
| Shares: | 21 million
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| Price: | $1.00
|
| Dividend: | Equal to 20% of amount by which the company's pretax profits for year exceed $10 million
|
| Conversion price: | $1.00
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| Conversion ratio: | Each preferred for one common share
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| Call: | May force conversion if stock exceeds $1.50 per share for more than 20 consecutive trading days. Automatically convert after July 22, 2006. May be redeemed after Dec. 31, 2012 at $1.00 each
|
| Warrants: | For 24 million shares
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| Warrant expiration: | July 22, 2006
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| Warrant strike price: | $1.00
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| Investors: | Quincy Investments Corp., Health Holdings and Botanicals LLC and Westgate Equity Partners, LP
|
| Settlement date: | July 22
|
| Stock price: | $0.08 at close July 22
|
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