Proceeds help fund acquisition of Emerging Solutions
By Devika Patel
Knoxville, Tenn., Aug. 18 - Emtec, Inc. negotiated a $10 million subordinated loan agreement with NewSpring SBIC Mezzanine Capital II, LP on Aug. 15, according to an 8-K filed Thursday with the Securities and Exchange Commission.
The 12% loan is due Aug. 15, 2016. Borrowings under the loan will carry additional interest at a rate of 2% per year, which is payable in cash or added to the outstanding principal at the companies' option.
NewSpring also received warrants for 903,606 shares, which are exercisable at $0.01 until Aug. 15, 2021. The strike price reflects a 98.15% discount to the Aug. 14 closing share price of $0.54.
Proceeds were used to pay a portion of the purchase price for the company's acquisition of Emerging Solutions LLC, to pay down debt and for related costs and expenses.
Emtec, is an information technology services provider based in Marlton, N.J.
| Issuer: | Emtec, Inc.
|
| Issue: | Subordinated loan
|
| Amount: | $10 million
|
| Maturity: | Aug. 15, 2016
|
| Coupon: | 12%, plus additional 2% per year payable in cash or added to outstanding principal at companies' option
|
| Warrants: | For 903,606 shares
|
| Warrant expiration: | Aug. 15, 2021
|
| Warrant strike price: | $0.01
|
| Investor: | NewSpring SBIC Mezzanine Capital II, LP
|
| Settlement date: | Aug. 15
|
| Stock symbol: | Pink Sheets: ETEC
|
| Stock price: | $0.54 at close Aug. 15
|
| Market capitalization: | $9.08 million
|
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