Optical components maker LightPath Technologies has announced that it is converting its 8 per cent senior secured convertible debentures that are due 1 August 2013.
As an incentive for debenture holders to convert their debentures prior to the maturity date, Lightpath issued over a million shares of common stock. Debenture holders holding about 93 per cent of the outstanding debentures have agreed to their early conversion. A debenture is an unsecured loan. It is backed by credit rather than assets.
Jim Gaynor, president and chief executive officer of LightPath, said: ‘The conversion of the debentures is very beneficial for the company because it removes an overhang on our stock and frees up cash for continued investment in our business. The purchase of these shares of common stock represents a further investment in the company and support of the strategic direction of our business.’
A debenture holder that did not agree to the conversion will be paid $75,000 by Lightpath. That sum represents the outstanding principal amount due under the debenture.