Deal also includes warrant for 688,073 shares, exercisable at $2.18
By Devika Patel
Knoxville, Tenn., March 12 - OCZ Technology Group, Inc. negotiated a $15 million loan with Hercules Technology Growth Capital, Inc. on March 11, according to an 8-K filed Tuesday with the Securities and Exchange Commission. The company has already drawn down $10 million, with the remaining $5 million contingent on OCZ remaining current in its SEC filings and achieving certain revenue levels for two consecutive quarters.
The loan matures on April 1, 2016. During the first year, the term loan will bear interest in cash at an annual interest rate equal to the greater of 12.5% or Prime rate plus 875 basis points. After the first year, the loan will bear interest in cash at an annual rate equal to the greater of 10% or Prime rate plus 625 bps.
Hercules also received a warrant for 688,073 shares, which is exercisable at $2.18 for five years. The strike price reflects a 26.01% premium to the March 8 closing share price of $1.73.
OCZ is a Sunnyvale, Calif.-based producer of computer memory and components.
| Issuer: | OCZ Technology Group, Inc.
|
| Issue: | Loan
|
| Amount: | $15 million
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| Maturity: | April 1, 2016
|
| Coupon: | Greater of 12.5% or Prime rate plus 875 bps (first year), the greater of 10% or Prime rate plus 625 bps (after the first year)
|
| Warrants: | For 688,073 shares
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| Warrant expiration: | Five years
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| Warrant strike price: | $2.18
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| Investor: | Hercules Technology Growth Capital, Inc.
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| Settlement date: | March 11
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| Stock symbol: | Nasdaq: OCZ
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| Stock price: | $1.73 at close March 8
|
| Market capitalization: | $140.04 million
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