By Sheri Kasprzak
Atlanta, May 31 - Home Solutions of America Inc. said it has received a $1.8 million loan as part of a private placement started March 31.
Patriot Capital LP was the investor in the offering.
The loan bears interest at 12% annually and is due March 31, 2010.
Patriot also received a warrant for 240,000 shares, exercisable at $0.01 each through March 31, 2012.
The financing was started March 31 when Home Solutions received $4 million as part of a mezzanine financing from Petra Mezzanine Fund LP to finance the acquisition of Cornerstone Building and Remodeling, Inc.
The terms of the promissory note provided by Petra are almost the same as the loan from Patriot, with a proportional change in the number of shares offered through the warrant.
On April 18, Home Solutions received a $500,000 loan from Laddcap Value Partners LP under the same terms.
Patriot has the option to loan an additional $700,000 to Home Solutions upon the completion of an audit of Cornerstone. If Patriot does invest the additional $700,000, it will receive a warrant for another 93,333 shares, exercisable under the same terms as the initial funding.
With the Petra note and the loans from Laddcap and Patriot, Home Solutions has secured $6.3 million from this round of financing.
Based in Dallas, Home Solutions provides home restoration services like fire and water restoration. The proceeds from the Patriot loan will be used to repay a seller's note received for the Cornerstone acquisition.
| Issuer: | Home Solutions of America Inc.
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| Issue: | Loan
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| Amount: | $1.8 million
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| Maturity: | March 31, 2010
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| Coupon: | 12%
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| Price: | Par
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| Yield: | 12%
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| Warrants: | For 240,000 shares
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| Warrant expiration: | March 31, 2012
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| Warrant strike price: | $0.01
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| Investors: | Patriot Capital LP
|
| Settlement date: | May 27
|
| Stock price: | $1.38 at close May 27
|
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