By Sheri Kasprzak
New York, Nov. 16 - Health Fitness Corp. said it settled a private placement of series B convertible preferred stock for $10.2 million.
The company issued 1,000 shares of the preferreds at $10,200 each to five accredited investors.
The preferreds will automatically convert into 5.1 million common shares once a registration statement is declared effective. The registration statement is expected to become effective by March 15, 2006.
The investors also received warrants for 1.5 million shares, exercisable at $2.40 each for five years.
Of the proceeds, $5.1 million will be used to redeem all of the company's outstanding series A convertible preferreds. The series A preferreds are currently convertible into 2.2 million common shares.
The remainder of the proceeds will be used for working capital.
Based in Minneapolis, Health Fitness provides on-site fitness and health management services to corporations.
| Issuer: | Health Fitness Corp.
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| Issue: | Series B convertible preferred stock
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| Amount: | $10.2 million
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| Shares: | 1,000
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| Price: | $10,200
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| Conversion ratio: | Into 5.1 million common shares
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| Warrants: | For 1.5 million shares
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| Warrant expiration: | Five years
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| Warrant strike price: | $2.40
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| Settlement date: | Nov. 14
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| Stock price: | $2.00 at close Nov. 14
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