Having received notice of acceptance from the TSX Venture Exchange, Audiotech Healthcare will be closing its private placement of convertible debentures reported in Stockwatch on April 6, 2004. Accordingly, the company will issue 659 $1,000 convertible debentures to 14 investors to raise a total of $659,000.
The convertible debentures earn interest at a rate of 10 per cent per year, compounded annually, and mature three years from the date of issue. Convertible debenture debt is convertible, at the option of the debentureholder, at any time before the maturity date at a conversion price of 20 cents of debt per share during the initial year, 22 cents of debt per share during the second year of the debenture term and 25 cents of debt per share during the third and final year of the debenture term. Hypothetically, if all debentureholders elected to convert all of their debt into shares during the initial year of the debenture term, the company's issued and outstanding share capital would thereby be increased by 3,295,000 shares.
Any shares acquired upon conversion will be subject to a four-month hold period calculated from April 8, 2004, as prescribed by the TSX-V.
Of the total proceeds raised of $659,000, $581,000 will be used by the company to discharge its obligations under matured or maturing convertible debenture debt, from earlier private placements. The balance will be used to enhance general corporate working capital $28,000 and to finance possible future acquisitions $50,000.
The convertible debentures are a direct, unsecured obligation of the company ranking subordinate to all senior indebtedness.