Deal for equipment funding expected to raise C$1.5 million-C$2 million
By Jennifer Chiou
New York, Oct. 25 - RMS Systems Inc. announced that it intends to take in between C$1.5 million and C$2 million through a non-brokered private placement of convertible debentures that will likely bear interest at 8% per year, payable quarterly.
The securities will be convertible at any time at the option of the holders into RMS common shares at a conversion price of $0.30 per share. The conversion price represents a 3.45% premium to the company's closing share price on Monday.
The debentures are anticipated to be redeemable at any time either prior to Oct. 15, 2011 at 104% or provided that RMS common shares are trading at a price in excess of C$0.45 per share at the time of the call. The convertibles are set to mature on Oct. 15, 2012.
The Calgary, Alta.-based company said that proceeds are earmarked for the acquisition of equipment necessary for the manufacture and installation of additional RigManager software units.
Closing of this financing is anticipated on Oct. 31. It is subject to TSX Venture Exchange acceptance.
| Issuer: | RMS Systems Inc.
|
| Issue: | Convertible debentures
|
| Amount: | C$1.5 million to C$2 million
|
| Maturity: | Oct. 15, 2012
|
| Coupon: | 8%, payable quarterly
|
| Conversion: | At $0.30 per share
|
| Call: | At any time either prior to Oct. 15, 2011 at 104% or provided that RMS shares are trading in excess of C$0.45 per share at time of call
|
| Announcement date: | Oct. 25
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| Settlement date: | Oct. 31
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| Stock symbol: | CVE: RMS
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| Stock price: | C$0.29 at close Oct. 25
|
| Market capitalization: | C$7.72 million
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