By Sheri Kasprzak
Atlanta, April 25 - Amedia Networks Inc. said it has closed a private placement of preferred stock for $6 million.
The company sold series B convertible preferred stock to individual and institutional investors.
The preferreds pay annual dividends of 8% and are convertible into common shares at $1.01 each. If the preferreds are not converted earlier, they will automatically convert into common shares on the fifth anniversary of issuance at the then-effective conversion price.
The investors also received warrants for 2.97 million shares, exercisable at $1.50 each for five years.
Because Amedia has a limited number of common shares available, $3 million of the offering will be deposited in an escrow account at closing pending shareholder approval. The next shareholders' meeting is scheduled for June 9. If the shareholders do not authorize an increase in common stock, the amount deposited in escrow will be returned to investors.
The deal is expected to close later this week.
Amedia will use $1.5 million of the proceeds to repay a short-term secured bridge loan it received on April 9. Based in Holmdel, N.J., Amedia develops Ethernet products for the ultra-broadband access market.
| Issuer: | Amedia Networks Inc.
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| Issue: | Series B convertible preferred stock
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| Amount: | $6 million
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| Dividends: | 8%
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| Conversion price: | $1.01
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| Warrants: | For 2.97 million shares
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| Warrant expiration: | Five years
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| Warrant strike price: | $1.50
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| Announcement date: | April 25
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| Stock price: | $1.17 at close April 22
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