HyperSpace Communications, Inc. Announces Extension of Credit Facility and $4.55 Million Private Placement 9/8/2006
DENVER, Sept 08, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- HyperSpace Communications, Inc. (Amex: HCO), a provider of enterprise IT hardware solutions through its subsidiary MPC Computers, LLC, today announced an extension of MPC's $25 million revolving credit facility along with a new $4.55 million private placement.
MPC's $25 million senior secured revolving credit facility is financed through Wachovia Capital Finance Corporation (Western) and has been extended through January 17, 2007. The credit facility is asset-based, with advances made primarily on eligible inventories and accounts receivable. The extension of this credit facility includes a requirement that HyperSpace raise an additional $4.7 million by November 28, 2006.
HyperSpace also announced the closing of a private placement of its convertible debentures with gross proceeds of $4.55 million, provided primarily by existing investors. HyperSpace is required to seek shareholder approval of the issuance and if obtained, the debentures will become convertible into shares of common stock at a conversion price of $0.75 per share. HyperSpace also issued an aggregate of 2,275,000 warrants to purchase common stock for $1.10 per share to the purchasers of the convertible debentures. In addition, investors who purchased $5 million of convertible debentures in April 2006 will roll those debentures plus accrued interest into the new debentures. HyperSpace intends to use the net proceeds of this offering for general corporate purposes, including working capital and the reduction of outstanding indebtedness.
"The extension of the credit facility and private placement offering are critical steps in the re-capitalization of the company," said John P. Yeros, Chairman and CEO of HyperSpace. "With these now accomplished, we are better positioned to seek additional financing and pursue our strategic objectives."
More information concerning the extension of the credit facility and the private placement can be found in a Form 8-K filed by HyperSpace September 8, 2006.