By Laura Lutz
Des Moines, Jan. 5 - Harold's Stores, Inc. secured another $2 million in financing from RonHow LLC, bringing the total size of the subordinated loan to $7 million.
The 13.5% loan matures May 2010 and is convertible into series 2006-B preferred stock at $1,000 of principal for each preferred share.
The loan may be further increased to $10 million at the investor's option.
The first tranche of the loan agreement closed on Aug. 31. At that time, RohHow received a warrant for up to 1,032 shares of series 2006-B preferred stock with a liquidation value of $1,000 each. The warrant expires in 10 years.
The preferreds are convertible into common shares at $0.43 each.
Proceeds from the offering will be used to pay down an existing revolving credit facility with Wells Fargo Retail Finance II LLC.
Dallas-based Harold's Stores operates specialty clothing stores in 19 states.
| Issuer: | Harold's Stores, Inc.
|
| Issue: | Convertible subordinated loan
|
| Amount: | $7 million
|
| Maturity: | May 2010
|
| Coupon: | 13.5%
|
| Price: | Par
|
| Yield: | 13.5%
|
| Conversion ratio: | Into one share of series 2006-B preferred stock per $1,000 in principal of debentures
|
| Conversion price: | Preferreds are convertible into common stock at $0.43 each
|
| Warrants: | For up to 1,032 shares of series 2006-B preferreds
|
| Warrant expiration: | 10 years
|
| Warrant strike price: | $1,000
|
| Investor: | RonHow LLC
|
| Settlement date: | Aug. 31 (for $5 million); Jan. 4 (for $2 million)
|
| Stock symbol: | OTCBB: HLDI
|
| Stock price: | $0.51 at close Aug. 31
|
| Stock price: | $0.36 at close Jan. 4
|
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