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Autumn 1999
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General Automation has announced that it has completed a major financial restructuring that allows it to retire $9.5 million in debt and the end the accrual of $1.6 million per year in royalty expense.
General Automation financed the restructuring through a $3,150,000 investment made by Pacific Mezzanine Fund (PMF) of San Francisco in the form of a secured subordinate debt, which is convertible into General Automation’s stock at the rate of $0.73 per share. PMF also received warrants to purchase 393,750 additional shares with an exercise price of $0.45 per share.
General Automation used $1,500,000 of the proceeds from the PMF investment, together with $750,000 in debt instruments and 1,133,333 shares of General Automation stock, to satisfy in full General Automation’s remaining obligations incurred in connection with its 1996 acquisition of the Sequoia Enterprise Systems division of Sequoia Systems, Inc.
Another $1,500,000 of the proceeds from the PMF investment, together with $750,000 in debt instruments and 1,133,333 shares of General Automation stock, was used to satisfy in full General Automation’s remaining obligations incurred in connection with its 1995 acquisition of Boundless Technologies’ MultiValue database business and to eliminate on-going royalty obligations to Boundless Technologies of approximately $1.6 million per year.
“This is a major positive development for our financial health and our future,” said Jane Christie, General Automation President and Chief Executive Officer.
“Closing this transaction has a significant positive impact on the company’s balance sheet, shareholders’ equity and future earnings,” stated Richard Nance, the Company’s Chief Financial Officer. “We are also pleased with the confidence by Pacific Mezzanine Fund in General Automation’s future which is demonstrated by their investment.”
General Automation, IncLast Updated: 10 December 1999