By Sheri Kasprzak
Atlanta, June 3 - Remote Dynamics, Inc. said it plans to raise $6.5 million in a private placement of series B convertible preferred stock.
The preferreds, which will be sold to an institutional investor, are convertible into common shares at $1.55 each.
The investor will also receive warrants for 2 million shares at $1.75 each for five years.
The proceeds from the preferreds will be used to redeem $5 million in series A convertible preferred stock held by the same investor buying the series B preferreds.
Connected to the private placement, Remote Dynamics received a bridge loan from the institutional investor for $1.75 million.
The note bears interest at 8% annually and is due on Sept. 30.
The bridge note automatically exchanges into a warrant for 1,666,667 common shares, exercisable at $0.01 each for five years and a warrant for 7 million shares, exercisable at $1.75 each for five years.
The exchange of the loan into common-share warrants is subject to shareholder approval, and the company expects to seek the approval at its annual shareholder meeting in August.
Based in Richardson, Texas, Remote Dynamics provides wireless telematics and global positioning systems to commercial fleets. The proceeds from the bridge loan will be used to fund the company's business plan.
Preferreds
| Issuer: | Remote Dynamics, Inc.
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| Issue: | Series B convertible preferred stock
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| Amount: | $6.5 million
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| Conversion price: | $1.55
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| Warrants: | For 2 million shares
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| Warrant expiration: | Five years
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| Warrant strike price: | $1.75
|
| Announcement date: | June 3
|
| Stock price: | $1.50 at close June 2
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|
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| Bridge loan
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| Issuer: | Remote Dynamics, Inc.
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| Issue: | Bridge loan
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| Amount: | $1.75 million
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| Maturity: | Sept. 30
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| Coupon: | 8%
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| Price: | Par
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| Yield: | 8%
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| Warrants: | Exchangeable into a warrant for 1,666,667 shares and a warrant for 7 million shares
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| Warrant expiration: | Five years
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| Warrant strike price: | $0.01 for 1,666,667 shares; $1.75 for 7 million shares
|
| Announcement date: | June 3
|
| Stock price: | $1.50 at close June 2
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