Convertible preferreds and convertible notes sold at discount
By Angela McDaniels
Tacoma, Wash., Aug. 21 - Streamline Health Solutions, Inc. completed a $12 million equity investment on Aug. 16 with Noro-Moseley Partners VI, LP, Charles Mosely and funds affiliated with Great Point Partners, LLC.
The investors purchased series A 0% convertible preferred stock, 12% convertible subordinated notes due Nov. 16, 2014 and warrants.
The investors paid $6.63 million for 2,416,784 convertible preferreds. The preferreds have a stated value of $3.00 each, or $7.25 million in total. They are convertible into shares of common stock on a one-for-one basis at any time. Beginning four years after issuance, they will be putable at $3.00 each.
The investors paid $4.34 million for $5.7 million principal amount of convertible notes. Once the company receives stockholder approval, the notes will convert into 1,583,220 convertible preferreds.
Until Sept. 1, 2013, half of the interest on the convertible notes will be payable monthly in cash and half will continue to accrue until the notes mature or are converted. After Sept. 1, 2013, all of the interest will continue to accrue until the notes mature or are converted.
The notes are prepayable at any time.
Finally, the investors paid $1.03 million to buy warrants for 1.2 million shares of common stock.
The warrants' exercise price is $3.99 per share. They may be exercised for five years beginning Feb. 17, 2013.
The effective conversion price of the preferreds, $3.00, is a 25% discount to the company's closing share price on Aug. 15, $4.00. The exercise price of the warrants is a 0.25% discount to the Aug. 15 closing share price.
Also on Aug. 16, the company closed its acquisition of New York-based Meta Health Technology, Inc., a provider of health information management solutions. The $15 million purchase price included $13.4 million of cash and $1.6 million of stock.
Streamline provides workflow and document management technology solutions for hospitals and physician groups. It is based in Cincinnati.
| Issuer: | Streamline Health Solutions Inc.
|
| Issue: | Convertible preferred stock, convertible notes and warrants
|
| Amount: | $12 million
|
| Investors: | Noro-Moseley Partners VI, LP, Charles Mosely, funds affiliated with Great Point Partners, LLC,
|
| Settlement date: | Aug. 16
|
| Stock symbol: | Nasdaq: STRM
|
| Stock price: | $4.80 at close Aug. 21
|
| Market capitalization: | $51.15 million
|
|
|
| Convertible preferreds
|
| Issue: | Series A convertible preferred stock
|
| Stated value: | $7,250,352, or $3.00 per share
|
| Shares: | 2,416,784
|
| Price: | $6,626,818.07
|
| Dividends: | None
|
| Conversion ratio: | One share of common stock per preferred
|
| Put option: | At $3.00 per share after four years
|
|
|
| Convertible notes
|
| Issue: | Convertible subordinated notes
|
| Principal amount: | $5,699,577
|
| Price: | $4,341,181.93
|
| Maturity: | Nov. 16, 2014
|
| Coupon: | 12%
|
| Conversion ratio: | Into 1,583,220 convertible preferreds upon receipt of shareholder approval
|
| Call option: | At any time
|
|
|
| Warrants:
|
| Issue: | Warrants for 1.2 million shares
|
| Price: | $1,032,000
|
| Exercise period: | Five years beginning Feb. 17, 2013
|
| Warrant strike price: | $3.99
|
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