By Sheri Kasprzak
Atlanta, Feb. 7 - Verso Technologies Inc. said it has closed a private placement for $13.5 million.
The company issued senior unsecured convertible debentures to institutional investors.
The debentures bear interest at 6% annually and are convertible into 27 million shares at $0.50 each. The debentures mature in February 2009.
The interest is payable quarterly beginning in April, and the principal is payable quarterly starting in August.
The investors also received series A warrants for 10.8 million shares and series B warrants for 10 million shares.
The series A warrants allow for an additional share at $0.72 each for five years, and the series B warrants allow for an additional share at $0.78 each, exercisable only if Verso's shareholders approve an amendment to its articles of incorporation to permit the issuance of all of the shares underlying the warrants. If exercised, the series B warrants expire in 90 days.
In conjunction with the private placement, the company's directors and executive managers have temporarily permitted the stock underlying their options to be used to satisfy the company's obligations to reserve the total number of common shares issuable upon conversion of the debentures and series A warrants. The options held by the management, therefore, are unexercisable until additional shares become available.
Verso, based in Atlanta, is a communications company for carriers and service providers.
| Issuer: | Verso Technologies Inc.
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| Issue: | Senior unsecured convertible debentures
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| Amount: | $13.5 million
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| Maturity: | February 2009
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| Coupon: | 6%
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| Price: | Par
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| Yield: | 6%
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| Conversion price: | $0.50
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| Conversion ratio: | Into 27 million common shares
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| Settlement date: | Feb. 7
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| Stock price: | $0.50 at close Feb. 7
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| Series A warrants
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| Warrants: | For 10.8 million shares
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| Warrant expiration: | Five years
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| Warrant strike price: | $0.72
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| Series B warrants
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| Warrants: | For 10 million shares
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| Warrant expiration: | 90 days, if Verso's shareholders approve the issuance of all of the shares underlying the warrants
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| Warrant strike price: | $0.78
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