By Sheri Kasprzak
New York, Aug. 31 - NHC Communications Inc. said it intends to raise up to $6 million in a private placement of convertible debentures.
The debentures bear interest at 8% annually, mature in three years and, for the first $500,000 in debentures issued, are convertible into common shares at $0.27 each.
For subsequent issues, the conversion price will be equal to a 20% discount to the volume weighted average price for the five trading days before closing.
The company may force conversion of the debentures if it stock exceeds twice the conversion price for more than 20 consecutive trading days.
For the first $500,000 investment, the buyers will receive warrants equal to all of the shares issuable upon conversion. The warrants are exercisable at $0.38 each for three years. For the remainder of the offering, the investors will receive warrants equal to 75% of the shares issuable upon conversion. Those warrants will be exercisable at a price equal to 115% of the volume weighted average price for five days before closing. The warrants expire in three years.
So far, NHC has received $50,000 from the offering and will receive $450,000 on Sept. 5; $200,000 on Sept. 15; $300,000 on Sept. 30; $500,000 on Oct. 30 and $500,000 on Nov. 30.
Assuming the company meets certain milestones, it may receive up to $4 million in additional debentures.
Based in Montreal, NHC develops voice and data communications products for telecommunications providers.
| Issuer: | NHC Communications Inc.
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| Issue: | Convertible debentures
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| Amount: | $6 million
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| Maturity: | Three years
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| Coupon: | 8%
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| Price: | Par
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| Yield: | 8%
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| Conversion price: | $0.27 for the first $500,000; conversion price is equal to 20% of the volume weighted average price for five trading days before closing on subsequent installments
|
| Call: | May force conversion if stock exceeds twice the conversion price for more than 20 consecutive trading days
|
| Warrants: | For all of the shares issuable upon conversion for the first $500,000; for 75% of the shares issuable upon conversion for the remainder
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| Warrant expiration: | Three years
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| Warrant strike price: | $0.38 for warrants issued with the first $500,000; equal to 115% of the volume weighted average price for five days before closing on all other warrants
|
| Settlement date: | Aug. 30
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| Stock price: | $0.295 at close Aug. 30
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