Nitches Inc announced that is has entered into a Securities Purchase Agreement with two unaffiliated institutional investors for the sale of 12.0% Subordinated Convertible Debentures and Common Stock Purchase Warrants.
The transaction involved the issuance of an aggregate of $3.15 million principal amount of Debentures and 577,500 Warrants, and resulted in net proceeds of $2.95 million, after deduction of fees and expenses. Granite Financial Group, an investment bank, acted as advisor to Nitches and received a $150,000 debenture in payment of its services.
"This financing bolsters our working capital, providing additional capital to increase our core business as it develops," commented Steve Wyandt, CEO of Nitches. "In addition, it will increase our ability to be opportunistic about strategic initiatives when they arise."
Interest on the Debentures accrues at the rate of 12% per annum and is payable quarterly on February 28, May 31, August 31, and November 30, commencing on August 31, 2007. The Debentures are due December 31, 2009. Nitches has the right to redeem the Debentures, or any part thereof, before the maturity date for cash upon notice to the holder upon payment of 110% of the amount outstanding on the Debentures being redeemed.
The holders of the Debentures have the right to convert at any time, at their election, at a conversion price of $4.12 per share, subject to adjustment including full-ratchet anti-dilution protection. Nitches has the right to force conversion of the Debentures, subject to certain restrictions, at the lower of the conversion price or a 15% discount to the variable weighted average price for Nitches' Common Stock.
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