Integrated BioPharma Closes $11.7 Million Facility With PNC
Integrated BioPharma, Inc. (INBP) announced the closing of a new five-year $11.7 million revolving credit and term facility with PNC Bank on June 27, 2012 and the refinancing of INBP’s subordinated debt.
The PNC Bank credit facility consists of an $8 million revolving line of credit and a $3.727 million term loan, secured by all assets of INBP and its active subsidiaries. INBP borrowed an initial revolving advance of approximately $2.679 million. Revolving credit line advances bear interest at PNC’s Base Rate or the Eurodollar Rate, at INBP’s option, plus 2.75%. The term loan bears interest at PNC’s Base Rate or the Eurodollar Rate, at INBP’s option, plus 3.25%.
INBP also announced that on June 27, 2012 it completed a refinancing of its defaulted subordinated convertible note in the original principal amount of $4.5 million held by CD Financial, LLC, an affiliate of two of INBP’s directors, and a second promissory note in the original principal amount of $300,000 held by CD Financial, LLC. As part of this refinancing, INBP issued to CD Financial, LLC two promissory notes, in the original principal amounts of $5,300,000 and $1.714 million. The notes are also secured by all assets of INBP and its active subsidiaries, bear a per annum interest rate of 6% and mature on July 7, 2017. The lien of CD Financial and its payment rights in respect of the notes are subordinated to PNC Bank. The $5.3 million promissory note is convertible at the option of CD Financial, LLC into common stock of INBP at a conversion price of $0.65 per share, subject to customary adjustments.
The proceeds of the initial PNC Bank advances and the refinancing of INBP’s subordinated convertible debt with CD Financial, LLC provided INBP with the capital necessary to repay its defaulted notes payable in the aggregate original principal amount of $7 million held by Imperium Master Fund, LTD and three other parties, a $1 million forbearance fee under the Forbearance Agreement, dated as of October 14, 2012, as well as interest and expenses owed to the Imperium Parties and $805,000 representing an 11.5% premium owed on the original maturity date of the defaulted notes payable, November 15, 2009.
E. Gerald Kay, CEO, stated, “We are delighted to establish this relationship with PNC Bank which has allowed us to strengthen our financial condition and facilitate the growth of core business focused now in the manufacturing of tablets and capsules of nutritional supplements and the sale and distribution and sale of our branded liquid nutraceutical products. The credit facility provides us with a flexible economic tool to assist us in managing our cash flows and to help us mitigate potential cash flow impediments to our planned growth.”
Integrated BioPharma, Inc. is engaged primarily in manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products.