By Sheri Kasprzak
Atlanta, May 18 - Nestor Inc. said it has closed a private placement for $6 million.
The company sold convertible notes to Laurus Master Fund Ltd.
The notes are due May 16, 2008 and bear interest at Prime rate plus 400 basis points annually with a 6% floor. The notes are convertible into common shares at $5.82 each.
The notes come with a provision that reduces the interest rate to Prime rate plus 200 basis points once the company's stock price exceeds the conversion price, with 2% reductions each time the stock exceeds the conversion price by more than 25%.
The notes are redeemable at any time at 115% of the principal amount plus interest.
Laurus also received warrants for 100,000 shares. The warrants are exercisable at $6.69 each for up to 60,000 shares, $7.28 each for up to 23,000 shares and $8.44 each for up to 17,000 shares. The warrants expire May 16, 2010.
Based in Providence, R.I., Nestor manufactures video-based traffic safety products.
| Issuer: | Nestor Inc.
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| Issue: | Convertible notes
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| Amount: | $6 million
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| Maturity: | May 16, 2008
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| Coupon: | Prime rate plus 400 basis points, 6% floor, subject to reduction if stock exceeds conversion price
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| Conversion price: | $5.82
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| Call: | Redeemable any time at 115% of principal amount plus interest
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| Warrants: | For 100,000 shares
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| Warrant expiration: | May 16, 2010
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| Warrant strike price: | $6.69 for up to 60,000 shares; $7.28 for up to 23,000 shares; $8.44 for up to 17,000 shares
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| Investor: | Laurus Master Fund Ltd.
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| Settlement date: | May 16
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| Stock price: | $5.40 at close May 16
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