CARVER CORPORATION DETAILS $3.5 MILLION PRIVATE PLACEMENT.LYNNWOOD, Wash.--(BUSINESS WIRE)--May 16, 1996--Carver Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CAVR CAVR Canadian Administrators of Volunteer Resources CAVR Canadian Agreement on Vehicle Registration CAVR Center for Audio-Visual Research CAVR Completeness, Accuracy, Validity and Restricted access (financial accounting) ), today reported details of its pending $3.5 million private placement of convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". and warrants with Renwick Capital Management, a New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of based investment fund. The preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. will yield approximately 8%, a percentage of which may be paid in kind. If the warrants and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. are fully exercised and converted, approximately 1.7 million additional shares would be issued. The transaction is expected to close in June. "As we reported yesterday, Carver Corporation has entered into a Letter of Intent with Renwick Capital Management to provide new equity capital to address our current working capital deficit," stated Stephen M. Williams, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and President. "The cash infusion will have an immediate, positive effect on our operations. First, we will use approximately $1 million of the new capital to purchase sourced products to fill existing orders and to build inventory in our most popular audio products. Another $1 million will be used throughout the year to step up our brand marketing and related activities, upgrade product design and retool. The remaining capital will be used to accelerate the development of speakers and receivers for the burgeoning home theater market, complete the certification process for European safety standards, reduce our debt and bolster cash reserves. "Circuit City has expressed keen interest in offering a full line of Carver audio components for home theater systems," stated Williams. "Carver's proprietary audio technology for amplifier, preamplifiers and tuners is very well suited for the home theater application. Our technology and brand recognition are the reasons Circuit City chose Carver as one of its top-of-the-line audio suppliers. We hope to introduce several new products for the home theater market later this year, including a new line of speakers." Renwick Capital Management specializes in identifying and investing in undervalued Undervalued A stock or other security that is trading below its true value. Notes: The difficulty is knowing what the "true" value actually is. Analysts will usually recommend an undervalued stock with a strong buy rating. growth companies, both publicly traded and privately held. "The capital investment we plan to make in Carver reflects our confidence in the company's ability to grow and prosper. We believe this cash infusion will provide Carver with adequate working capital for the foreseeable future," stated Raj K. Bhatia, General Partner of Renwick. The Letter of Intent is subject to further negotiations and satisfaction of a number of closing conditions. As a result, there can be no assurance the negotiations will result in a definitive agreement acceptable to the Company and the prospective investor, or that closing conditions can be satisfied. Safe Harbor statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Statements in this news release looking forward in time involve risks and uncertainties, including the effect of changing economic conditions, trends in the audio components market, product demand and market acceptance risks, risks associated with manufacturing, import and seasonality and other risk factors detailed in the Company's Securities and Exchange Commission filings. Carver Corporation designs, develops, manufactures and markets high-fidelity consumer audio components and systems which are known for their superior sound reproduction. CONTACT: Carver Corporation John P. World, 206/775-1202 or Renwick Capital Management Raj K. Bhatia, 212/644-0929 |
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