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Lifevantage announces optional redemption of $3 million convertibles
By Devika Patel
Knoxville, Tenn., May 17 - Lifevantage Corp. said its management believes it is prudent to redeem all $3 million of its convertible debentures due to the company's rapid revenue growth, improving operating income and strengthening balance sheet. The redemption is expected to decrease the company's quarterly interest expense and remove the associated debt from its balance sheet.
Holders may convert their debentures into shares prior to the repayment date, and management expects that the investors will choose to convert the debentures into about 15 million common shares. Its stock (OTCBB: LFVN) closed at $1.76 per share on May 16.
The optional redemption notice is expected to be delivered to investors on Wednesday. The redemption is expected to settle by the end of the fourth quarter.
"We have greatly improved our balance sheet during the first nine months of fiscal 2011, and based on our developing financial strength, we plan to redeem or cause the conversion of the approximately $3 million that remains outstanding under the convertible debentures we issued in 2009 and 2010," chief financial officer Carrie McQueen said in a press release.
"This supports our focus on improving operating income and operating cash flow by reducing our interest expense.
"Additionally, we are striving to provide greater transparency in our financial statements, which will be improved by minimizing the complexity and amount of the non-cash derivative accounting affects on our balance sheet and income statement. Once the debentures have been repaid or converted, we expect to enter fiscal 2012 with a strong cash position and no debt," McQueen concluded.
Greenwood Village, Colo.-based Lifevantage specializes in health products.
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