Budgeting, Planning & Forecasting

Budgeting, Planning & Forecasting

December 28, 2010

$15 Million Equity Raised by Broadcast International

A $15 million round of equity financing has been completed by Broadcast International Inc. (BCST). According to the announcement made by BCST, the Company has also restructured $18.8 million of convertible indebtedness.

$15 million were raised by BCST with help from Philadelphia Brokerage Corporation. The Company sold 12.5 million units at $1.20 per unit. Two shares of common stock comprise of one unit. Each unit also consists of one warrant to purchase an additional share of common stock for $1.00 per share.

In a release, Rod Tiede, president and CEO of BCST, said, "We are extremely pleased to have secured this additional equity and to have restructured our debt. With this raise, we are now in a position of much greater strength to aggressively market the groundbreaking technology within the CodecSys software platform."

According to Tiede, BCST expects to see great returns from the development efforts as several pilots are underway. The Company also expects another doubling of the digital signage revenues. This significant revenue will contribute towards a positive cash flow next year. In 2011, the total revenues are expected to exceed $25 million.

BCST’s senior note holder had held $17.8 million in principal and capitalized interest which was due later in the month. Without the restructuring, the Company would not have been successful in reducing this aggregate indebtedness. $5.25 million in cash from the equity raise was given to the lender. The lender also received an amended and restated 6.25% senior convertible note in the aggregate principal amount of $5.5 million. This note, due in December 2013 is now convertible into shares of BCST common stock.

Approximately $7 million of existing debt has been forgiven by the lender. 5,208,333 shares of BCST common stock were purchased by the lender by cancelling outstanding warrants of BCST. Holding an 8 percent convertible $1 million note due January 1, 2011, a junior lender has now extended this note until December 2013.

In a release, Jim Solomon, CFO of BCST, said, "We greatly appreciate the continued support and confidence from our note holders and investors. With this equity financing and strengthened balance sheet we can take advantage of the substantial growth opportunities available to both of our divisions in 2011." 

Calvin Azuri is a contributing editor for TMCnet. To read more of Calvin’s articles, please visit his columnist page.

Edited by Jaclyn Allard

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