PISCATAWAY, New Jersey--Milestone Scientific, a leader in advanced injection technologies, has announced entering into an agreement to extinguish $1.3 million of its outstanding debt in exchange for 822,000 shares of its common stock.
On June 28, 2007, Milestone secured a $1 million line of credit from a longstanding shareholder of the sompany. The line of credit was amended in 2008 to $1.3 million.
Borrowings bore interest at 6% per annum, with one year's interest at 1% payable in advance on each draw. The full amount of the line of credit and amendment, $1.3 million, had been drawn as of Sept. 30, 2009.
The outstanding debt due the investor was originally eligible for conversion into equity at a price of $0.26 per share; however, pursuant to a new agreement entered into with the investor on Dec. 28, 2009, the debt has been converted into equity at a price per share of $1.58.
As a consequence of the debt conversion, Milestone's balance sheet will no longer reflect the note as a current liability, thus increasing total stockholders' equity from $770,765 at Sept. 30, 2009, to $2.07 million.
Leonard Osser, chief executive officer of Milestone, noted, "We are very pleased to announce the conversion of $1.3 million in current debt to equity. This transaction significantly strengthens our balance sheet, eliminates further interest accrual and positions our Company to fully capitalize on our anticipated growth opportunities in the coming year. I'd like to again thank our trusted shareholder for standing by Milestone over many years and for his generous support and demonstrated commitment to our Company's long term success."
The certificates for the shares issued in connection with the debt conversion will bear a restrictive legend. Milestone Scientific is relying on the "exempt security" provisions set forth in Section 3(a)(9) under the Securities Act of 1933, as amended, in issuing the shares in the debt conversion, as well as the transactional exemptions provided by Sections 4(2) and 4(6) of the Act and Regulation D.
The shares of common stock issued in connection with the debt conversion represent approximately 5.8% of the Company's total outstanding shares immediately preceding the transaction.
For more information on the STA System and other Milestone products, visit the company's Web sites found at Milestone Scientific and STA System.
To read more about Milestone Scientific, go to Milestone Scientific.
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