WorldGate accused of being in default on convertible debentures

By Devika Patel

Knoxville, Tenn., Feb. 20 - WorldGate Communications, Inc. said in an 8-K filing with the Securities and Exchange Commission on Wednesday that YA Advisors notified the company that it is in default on $6.7 million of its convertible debentures, which were issued to YA in a private placement.

The company said it received the notices on Feb. 13 and Feb. 15. The notices claim that the company is in default for failure to maintain current financial statements in the registration statement relating to the sale of the company's common shares, which are issuable upon conversion of one of the debentures, and failure to comply with a covenant relating to information disclosure.

YA said in the notices it is exercising its right to accelerate payment of the full principal amount of the debentures.

WorldGate said in the filing that the registration default was corrected on Feb. 15, but that YA also is alleging other defaults. The company said in the filing it is disputing these claims, along with YA's right to accelerate payment. It also said it is working with YA to resolve the dispute.

Trevose, Pa.-based WorldGate designs, manufactures and distributes the Ojo line of personal video phones.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.