By Sheri Kasprzak
Atlanta, May 9 - Citadel Securities Software Inc. has closed the first tranche of its $11 million private placement for $7 million.
The company sold series B convertible preferred stock to Satellite Strategic Finance Associates, LLC.
The preferreds mature in three years, do not accrue dividends and are convertible into common shares at $1.55 each.
The investor also received warrants for 2.8 million shares, exercisable at $1.75 each for 10 years.
Citadel has the option to sell an additional $4 million in series B preferreds upon the approval of its shareholders. The next shareholders' meeting is scheduled for July.
If the option is approved by shareholders, Citadel will issue warrants for 1,232,000 shares, exercisable under the same terms, in a second closing.
Wachovia Securities Corp. was the financial adviser in the deal.
Also, Satellite said it will waive the 5% dividend on its series A preferred stock investment until Citadel receives shareholder approval to reduce the conversion price on the series A preferreds to $3.00 each from $5.00 each. Satellite will also cancel 1.2 million warrants issued in connection with the series A offering. If Citadel does not receive shareholder approval, the dividends will be reinstated.
Based in Dallas, Citadel develops software to combat online security attacks.
| Issuer: | Citadel Security Software Inc.
|
| Issue: | Series B preferred stock
|
| Amount: | $7 million
|
| Maturity: | Three years
|
| Conversion price: | $1.55
|
| Warrants: | For 2.8 million shares
|
| Warrant expiration: | 10 years
|
| Warrant strike price: | $1.75
|
| Investor: | Satellite Strategic Finance Associates, LLC
|
| Settlement date: | May 9
|
| Stock price: | $1.23 at close May 9
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
