Brokered deal's proceeds to be used for advertising, product promotion
By Devika Patel
Knoxville, Tenn., Sept. 28 - Yayi International Inc. said it settled an $8.92 million private placement of convertible notes.
The notes were sold in 892 units of a $10,000 three-year 9% convertible note and three-year series F warrants for 1,250 shares.
The convertibles convert into common stock at $2.00 per share. The conversion price is a 70.94% premium to the closing share price of $1.17 on Sept. 27.
At any time after Sept. 27, 2011, the company may redeem all of the convertibles at 108, plus interest.
Each warrant will be exercisable at $2.50. The strike price reflects a 113.68% premium to the Sept. 27 share price.
Proceeds will be used for advertising, product promotion, expansion of the company's distribution network, capital expenditures and general corporate purposes.
"The closing of this private placement is another milestone for Yayi International. We believe that the transaction will benefit all of our stakeholders as we expect to use the funds prudently to support the rapid expansion of our goat milk business. Furthermore, the current financing will broaden the company's investor base," company chairwoman and chief executive officer Li Liu said in a press release.
The terms of the private placement also include a make-good agreement under which common shares pledged by a major company shareholder will be held in escrow and transferred to the investors on a pro-rata basis if the company's combined net sales for the fiscal years ending March 31, 2011 and 2012 is less than $125 million. The number of the make good shares initially held in escrow equals 15% of the shares issuable upon full conversion of the notes.
Yayi is a manufacturer and distributor of goat milk powder products based in XiQing, China.
| Issuer: | Yayi International Inc.
|
| Issue: | Units of a $10,000 three-year 9% convertible note and three-year series F warrants for 1,250 shares
|
| Amount: | $8.92 million
|
| Units: | 892
|
| Warrants: | For 1,250 shares
|
| Warrant expiration: | Three years
|
| Warrant strike price: | $2.50
|
| Agent: | Euro Pacific Capital, Inc.
|
| Settlement date: | Sept. 28
|
| Stock symbol: | OTCBB: YYIN
|
| Stock price: | $1.17 at close Sept. 27
|
| Market capitalization: | $30.4 million
|
|
|
| Notes
|
| Maturity: | Sept. 27, 2013
|
| Coupon: | 9%
|
| Price: | Par of $10,000
|
| Yield: | 9%
|
| Conversion price: | $2.00
|
| Conversion premium: | 70.94%
|
| Call: | After Sept. 27, 2011 at 108
|
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