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Methuen, Mass. — Parlex Corp. has raised $6 million through the sale of 7 percent convertible subordinated notes and warrants to five institutional investors.
The notes have a maturity date of July 28, 2007, and pay interest quarterly in common stock. The warrants permit the investors to purchase up to 300,000 shares of common stock at an exercise price of $8 per share.
The notes have a conversion price of $8 per share, and may be converted into common stock at any time, in whole or in part, at the option of the investors. Parlex may redeem the notes after two years upon satisfaction of certain conditions. The note holders have a put option, exercisable after July 28, 2006, requiring Parlex to redeem all of the then outstanding notes. Parlex has received net proceeds of approximately $5.5 million after deducting estimated commissions and expenses associated with the transaction.
In connection with the securities issued at the closing, the aggregate number of shares of common stock issuable upon exercise of the warrants and conversion of the convertible subordinated notes, including the payment of interest in shares of common stock, is limited to an aggregate of 19.99 percent of the number of shares of common stock outstanding as of the closing, unless shareholder approval is obtained. Parlex has agreed to file a registration statement with the Securities and Exchange Commission (SEC) covering the resale from time to time of the shares of the common stock to be issued as interest on the notes, or in connection with the conversion of the notes or exercise of the warrants.
Parlex Corp. is a world leader in the design and manufacture of flexible interconnect products. For more information, visit www.parlex.com.