By Sheri Kasprzak
Atlanta, Nov. 11 - OMT Inc. said it plans to raise up to C$1.4 million in convertible debentures as part of a plan to raise additional capital.
The company will place a minimum of C$1 million and a maximum of C$1.4 million in 8% subordinated convertible debentures through investment dealer Wellington West Capital Inc.
The four-year debentures are convertible into common shares at C$0.10 per share for two years, C$0.11 in the third year and C$0.12 in the fourth year.
Wellington will receive a commission of 7% of the gross proceeds and broker warrants equal to 10% of the proceeds. The broker warrants allow Wellington to buy one common share at C$0.10 for two years.
Also, Ensis Growth Fund Inc. has agreed to invest up to C$840,000 in subordinated convertible debentures under the same terms. Ensis will restructure its existing C$570,000 subordinated loan to OMT into convertible debt on the same terms.
The company will also restructure its preferred shares in an agreement with Ensis and Renaissance Capital Manitoba Ventures Fund LP. The C$2 million in preferred shares were originally issued in August 2001. OMT will redeem all of its issued and outstanding preferred shares.
After those shares are redeemed, Ensis and Renaissance will reinvest the C$2 million into four-year convertible debt under the same terms as the private placement.
Renaissance and Ensis will receive about 16.9 million common shares at C$0.10 to satisfy the 20% annual return required under redemption.
Based in Winnipeg, Manitoba, OMT is a technology provider for media and broadcast companies. It plans to use the proceeds from the debentures to fund its growth plans.
| Issuer: | OMT Inc.
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| Issue: | Subordinated convertible debentures
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| Amount: | C$1 million (minimum); C$1.4 million (maximum)
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| Maturity: | Four years
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| Coupon: | 8%
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| Price: | Par
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| Yield: | 8%
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| Conversion price: | C$0.10 for two years; C$0.11 for the third year; C$0.12 for the fourth year
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| Warrants: | No
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| Investment dealer: | Wellington West Capital Inc.
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| Announcement date: | Nov. 10
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| Stock price: | C$0.10 at close Oct. 20 (last trade)
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