By Sheri Kasprzak
Atlanta, Feb. 14 - RCG Cos. Inc. said it has wrapped a private placement for $7,468,700.
The company sold two-year senior secured convertible debentures to seven accredited investors. The debentures are original issue discounted notes, discounted to $5,899,447.
The debentures are convertible into common shares at $1.30 each and mature on Feb. 8, 2007. The debentures do not bear interest.
RCG may redeem the debentures for cash at any time at 130% of the principal amount.
The investors also received warrants for 9,538,750 shares. Half of the warrants are exercisable at $1.55 each and the other half at $1.87 each. The warrants may not be exercised for 180 days from the closing date.
The company plans to hold a shareholders' meeting no later than May 31 to discuss the issuance of more than 20% of its common stock.
The company must also file a registration statement on the shares underlying the debentures and the warrants within 45 days of closing. If the statement is not filed or declared effective within 120 days, RCG must pay a cash fee equal to 1.5% per month to the debenture holders.
RCG, based in Charlotte, N.C., operates travel and technology services companies. The proceeds will be used for an initial deposit on its OneTravel, Inc. acquisition and for marketing and general working capital.
| Issuer: | RCG Companies Inc.
|
| Issue: | Senior secured convertible debentures
|
| Amount: | $7,468,700
|
| Maturity: | Two years
|
| Coupon: | 0%
|
| Conversion price: | $1.30
|
| Call: | Redeemable any time at 130% of principal
|
| Warrants: | For 9,538,750 shares
|
| Warrant strike price: | $1.55 each for half the warrants; $1.87 each for half the warrants
|
| Settlement date: | Feb. 8
|
| Stock price: | $1.55 at close Feb. 8
|
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