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INSCI Announces Conversion of $1.6 Million of Convertible Debt to Equity
INSCI Corp., provider of enterprise content management (ECM) solutions, today announced that two of the Company's principal shareholders, Paramus, NJ-based Selway Partners, LLC (Selway), and Wayne, PA-based CIP Capital L.P. (CIP) have exchanged and converted their existing $1.6 million convertible debentures to INSCI Series C Convertible Preferred Stock.
The Series C Convertible stock purchase agreement, which resulted in the conversion of the debt facility to equity, significantly improves the Company's balance sheet. The transaction was approved by INSCI's independent board and was effective as of the Company's fiscal year ended March 31, 2004.
The $1.6 million Series A Debentures were exchanged and converted into an aggregate of 831,726 shares of Series C Convertible preferred stock, which can be converted at a fixed conversion price into a total of 1.7 million shares of INSCI common stock. The transaction eliminates approximately $1.6 million of term debt, for an expected cash savings of principal and interest in excess of $1.9 million over the next two years; funds which are now available to fund INSCI's strategic growth initiatives.
INSCI President and CEO Henry F. Nelson said, "This marks another chapter in the three-year program to improve the Company's capitalization and strengthen its balance sheet. The financial benefits of this transaction are significant. It not only substantially reduces our interest expense, thereby freeing up cash, but it also increases shareholders equity. And more importantly, it helps position the Company to better pursue a number of expansion opportunities as it should provide significant cash availability to fund our growth plans."
Winston Churchill, CIP Managing General Partner, commented, "We willingly converted this debt to equity because of our confidence in management and support of the Company's business plan and growth strategy. We look forward to continuing participation in the growth of INSCI."
Over the past three years, INSCI has substantially improved its financial position to accelerate its growth plans. Through a series of initiatives, the Company has eliminated all term debt, improved its interest rate risk profile, enhanced current and future liquidity and aligned its capital management philosophy with its strategic plan.
"Taking these steps and eliminating this debt permits us to focus on and accelerate our future growth strategy," added Nelson. "Going forward, INSCI's improved financial performance and simplified balance sheet should help make our strategy more visible and easier for investors to understand." 16.04.2004, INSCI Corp.
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