Local Corporation Increases Working Capital by Approximately $3.0 Million and Extends Convertible Debt Maturities
March 10 2015 - 4:45PM
Business Wire
- Enters $10 Million Financing Agreement
-
Local Corporation (NASDAQ:LOCM), a leading local search and
advertising technology company, completed a series of transactions
bringing the aggregate amount of its outstanding Senior Convertible
Notes to approximately $9.32 million, raising approximately $3.0
million of new capital and extending the maturities.
Senior Convertible Notes
On March 9, 2015, the company entered into a Securities Purchase
Agreement relating to the sale and issuance of Senior Convertible
Notes, comprising $4.57 million aggregate principal amount of new
8% Senior Convertible Notes maturing in April 2018 and initially
convertible at $0.5534 (subject to adjustment), $250,000 of which
was invested by certain management and board members, and $4.75
million aggregate principal amount of 10% Partially Liquidating
Debentures maturing August 2016, initially convertible at $0.7090
(subject to adjustment). Both transactions included issuance of
five-year warrants with 50% coverage with an exercise price at
market. The company will issue the Partially Liquidating Debentures
pursuant to its effective shelf registration statement. The company
has agreed to file a registration statement covering the resale of
the common stock issuable upon conversion of the 8% Senior Notes
and upon issuance of the warrants. The company will use a portion
of the proceeds to repay its outstanding 7% Convertible Notes due
April 2015 and associated fees.
Credit Facility
In connection with execution of the Securities Purchase
Agreement, the company entered into a $10 million secured accounts
receivable financing agreement with Fast Pay Partners LLC
(“FastPay”) that matures in April 2016. This agreement is expected
to replace the company's senior secured facility with Square 1
Bank.
SEC Filing
The Company has filed in a report on Form 8-K dated March 10,
2015 with a description of the terms of the transaction and credit
facility, including a copy of the Securities Purchase Agreement and
exhibits. Management encourages investors to read the filing for a
better understanding of all terms of the transaction. The 8% Senior
Convertible Notes, the warrants and the common stock issuable upon
conversion of the 8% Senior Note and upon exercise of the warrants
have not been registered under the Securities Act of 1933, as
amended, and may not be offered or sold in the United States unless
registered or pursuant to an available exemption from
registration.
This press release does not and shall not constitute an offer to
sell, or the solicitation of an offer to buy, any of the
securities, nor shall there be any sale of securities in any state
or jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration under the securities laws of any
state or jurisdiction.
About Local Corporation
Local Corporation (NASDAQ:LOCM) is a leading local search
and advertising technology company that aggregates and curates the
most relevant and rich personalized content and presents it to
millions of consumers wherever and however they search for
information, while providing significant reach and value to the
company’s advertisers and partners. For more information,
visit: http://www.localcorporation.com or visit the company’s
flagship site: http://www.local.com.
Forward Looking
Statements
This press release contains certain “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Words or
expressions such as 'anticipate,' 'believe,' 'estimate,' 'plans,'
'expect,' 'intend,' ‘project,’ ‘forecast,’ ‘potential,’ ‘feel’ and
similar expressions and phrases are intended to identify such
forward-looking statements. Any forward-looking statements are
based on the beliefs of our management as well as assumptions made
by and information currently available to our management. Actual
results could differ materially from those contemplated by the
forward-looking statements as a result of certain factors,
including, but not limited to, our advertising partners paying less
revenue per click and revenues to us for our search results, our
ability to purchase advertising from third parties to drive users
to our sites and consumers to the sites of our advertisers,
including at a profit, our ability to retain a monetization partner
for the Local.com domain and other web properties under our
management that allows us to operate profitably, our ability to
develop, market and operate our local-search technologies and our
Krillion™ local shopping technologies, our ability to maintain and
grow the number of Network partner sites and the aggregate levels
of user traffic from such Network partner sites while also
maintaining the quality level of such traffic, our ability to
market the Local.com domain as a destination for consumers seeking
local-search results, our ability to adapt to policy and
technological changes promulgated by our advertising partners and
traffic acquisition partners, our ability to raise additional
capital to operate our business as needed and on terms that are
acceptable to us, if at all, the possibility that the information
and estimates used to predict anticipated revenues and expenses
associated with the businesses we acquire are not accurate,
difficulties executing integration strategies or achieving planned
synergies, the possibility that integration costs and go-forward
costs associated with the businesses we acquire will be higher than
anticipated, the possibility of impairment of assets associated
with the businesses we have acquired, our ability to successfully
expand our sales channels for new and existing products and
services, our ability to increase the number of businesses that
purchase our advertising products, our ability to expand our
advertiser and distribution networks, our ability to integrate and
effectively utilize our acquisitions' technologies, our ability to
develop our products and sales, marketing, finance and
administrative functions and successfully integrate our expanded
infrastructure, as well as our dependence on major advertisers, our
ability to successfully assert our intellectual property rights,
competitive factors and pricing pressures, changes in legal and
regulatory requirements, and general economic conditions. Any
forward-looking statements reflect our current views with respect
to future events and are subject to these and other risks,
uncertainties and assumptions relating to our operations, results
of operations, growth strategy and liquidity. All subsequent
written and oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by this paragraph. Unless otherwise stated, all site
traffic and usage statistics are from third-party service providers
engaged by the company.
Our most recent Annual Report on Form 10-K, our Quarterly
Reports on Form 10-Q, recent Current Reports on Form 8-K, and other
Securities and Exchange Commission filings discuss the foregoing
risks as well as other important risk factors that could contribute
to such differences or otherwise affect our business, results of
operations and financial condition. The forward-looking statements
in this release speak only as of the date they are made. We
undertake no obligation to revise or update publicly any
forward-looking statement for any reason.
Investor Relations Contact:LHAKirsten Chapman,
415-433-3777local@lhai.comorMedia Relations Contact:Local
CorporationCameron Triebwasser,
949-789-5223ctriebwasser@local.com
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