By Sheri Kasprzak
New York, Oct. 19 - Vertical Communications, Inc. secured $22 million from a private placement of series E convertible preferred stock.
The company plans to sell 22,000 shares of the preferreds at $1,000 each.
The preferreds pay dividends at $80.00 per year and are convertible into 46,226,415 common shares at $0.53 each.
The investors will receive tranche I warrants for 20,754,717 shares and tranche II warrants for 20,754,717 shares.
Both sets of warrants are exercisable at $0.58 per share. The tranche I warrants expire in 10 years, and the tranche II warrants are exercisable only if the company fails to consummate another financing with 270 days of closing. If exercisable, the tranche II warrants also expire in 10 years.
Completion of the placement is contingent upon the closing of Vertical's merger with Vodavi Technology, Inc.
Located in Cambridge, Mass., Vertical develops hardware and software used in the communications sector.
| Issuer: | Vertical Communications, Inc.
|
| Issue: | Series E convertible preferred stock
|
| Amount: | $22 million
|
| Shares: | 22,000
|
| Price: | $1,000
|
| Dividends: | $80.00 per year
|
| Conversion price: | $0.53
|
| Conversion ratio: | Into 46,226,415 shares
|
| Warrants: | Tranche I for 20,754,717 shares, tranche II for 20,754, 717 shares
|
| Warrant expiration: | 10 years
|
| Warrant strike price: | $0.58
|
| Announcement date: | Oct. 19
|
| Stock symbol: | OTCBB: VRCC
|
| Stock price: | $0.80 at close Oct. 19
|
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