By Laura Lutz
Des Moines, Dec. 6 - NewMarket Technology, Inc. and some of its subsidiaries completed a $4 million private placement of secured convertible notes with warrants, according to an 8-K filing with the Securities and Exchange Commission.
The convertibles mature on Nov. 30, 2010 and bear interest at Prime rate plus 200 basis points, capped at 9% per year.
NewMarket is required to make monthly amortizing payments of $73,333 on the convertibles beginning on June 1, 2008. The holders may convert a portion of the monthly payment into stock if the average closing price of the stock is at least $0.23 and the amount of the conversion does not exceed 25% of the average dollar trading volume of the stock for the 22 trading days preceding the date of the payment.
The conversion price will be $0.20 per share.
Valens Offshore SPV II, LLC, which bought $2.2 million principal amount of the convertibles, received warrants for 3,825,840 shares. Valens U.S. SPV I, LLC, which bought $1.8 million principal amount of the notes, received warrants for 8,347,287 shares.
The warrants are exercisable at $0.22 per share for five years.
NewMarket also issued a $3 million non-convertible revolving note to Valens U.S. That note has the same maturity rate and interest terms as the convertible notes.
LV Administrative Services, Inc. was the agent for both deals.
Proceeds will be used to expand the company's North American sales, according to a news release.
New Market is a Dallas-based provider of systems services and technology.
| Issuer: | NewMarket Technology, Inc.
|
| Issue: | Secured convertible notes
|
| Amount: | $4 million
|
| Maturity: | Nov. 30, 2010
|
| Coupon: | Prime rate plus 200 bps, capped at 9%
|
| Price: | Par
|
| Conversion price: | $0.20
|
| Warrants: | For 12,173,127 shares
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.22
|
| Agent: | LV Administrative Services, Inc.
|
| Investors: | Valens Offshore SPV II, LLC (for $2.2 million); Valens U.S. SPV I, LLC (for $1.8 million)
|
| Pricing date: | Nov. 30
|
| Stock symbol: | OTCBB: NMKT
|
| Stock price: | $0.21 at close Nov. 30
|
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