QualityStocks would like to highlight Broadcast International (OTCBB: BCST), a leading provider of video-powered broadcast solutions, including IP, digital satellite, Internet streaming, and other types of wired/wireless network distribution. BI's patented CodecSys software is a breakthrough, multi-codec video compression technology that cuts video bandwidth requirements over satellite, cable, IP and wireless networks.
In the company’s news yesterday,
Broadcast International announced the completion of its private placement equity financing with a group of institutional and qualified individual investors for gross proceeds of $6.95 million, which the company plans on using for marketing purposes, as well as to reduce long and short-term debts.
After paying financing-related costs, the company will have net proceeds of approximately $5.2 million.
As part of its debt reduction strategy, Broadcast International paid $2.75 million in cash and 2 million shares of common stock to its senior convertible note holder in exchange for retiring a long-term note of $5.5 million plus accrued interest, carrying a substantial reset provision. Additionally, holders of $400,000 in short-term notes and $500,000 in accounts payable have converted their balances into shares of common stock in the offering.
“The combination of these transactions allowed us to reduce our long-term debt by 85 percent and at a discount to par, as well as convert $900,000 in short-term liabilities to equity, and thereby substantially strengthening our balance sheet,” Jim Solomon, Broadcast International’s CFO stated in the press release.
After Broadcast International pays off the long-term note and financing costs, the net cash to the company is approximately $2.3 million, which it will use for marketing purposes.
“The additional capital resources also allows us to more aggressively capitalize on the media industry’s rapid transition to IP-based video, especially OTT and Cloud-based applications, through more extensive marketing of our disruptive CodecSys technology,” Broadcast International president and CEO Rod Tiede stated.
Broadcast International’s patented CodecSys software is an artificial intelligence-based video compression technology that cuts video bandwidth requirements more than 50 percent over satellite, cable, IP, and wireless networks. This company said this feature enables applications such as OTT (Over-the-Top) and Cloud streaming of videos to any device, including smartphones.
The financing terms included the sale of 27.8 million shares of Broadcast International’s common stock at $0.25 per share, in exchange for $6.05 million of cash and $900,000 of debt conversion; plus a six-year warrant for an additional share of common stock exercisable at $0.35 per share for each two shares of common stock purchased.
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Forward-Looking Statement:
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.
