Nashville, Tenn.-Shop at Home Inc. recently completed a $20 million private placement of convertible preferred stock to help fund working capital, acquisitions of additional television stations, expansion of cable and satellite distribution and other general corporate needs.
Promethean Asset Management led a group of institutional investors that put up the money.
Shop at Home president Kent Lillie said in a prepared statement that the company has "numerous strategic opportunities in development" that will benefit from this financing.
According to Shop at Home, the preferred stock is convertible into common stock beginning six months from the closing date at conversion rates that increase monthly to a maximum of 88 percent of the lowest closing-bid price of its common stock for the four days prior to conversion. The conversion price caps at $12 per share.
Shop at Home stock closed at $5.18 per share July 3. The stock fell to $4.63 in afternoon trading July 5.
The warrants also allow investors to buy 2 million common shares at $5 each. That would generate an additional $10 million for Shop at Home.
"After reviewing our options, we believe that this financing offers us an excellent opportunity to strengthen our balance sheet," Shop at Home chief financial officer Arthur Tek said in a prepared statement. "It will allow us to continue to grow our business, to pursue acquisition opportunities more aggressively, to complete the full development of collectibles.com and to promote our core brand, Shop at Home."
Shop at Home sells specialty consumer products-primarily collectibles-via the Internet, as well as over broadcast-, cable- and satellite-television networks.