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MATTHEWS, N.C.--PokerTek, the industry pioneer and worldwide leader in automated poker tables, announced today that it has entered into agreements to extinguish $1.2 million of its outstanding debt in exchange for 1,445,784 shares of common stock.
Lyle Berman, James Crawford and Lee Lomax, all members of the Company’s Board of Directors, participated in the debt conversion. Mr. Berman converted $500,000, Mr. Crawford converted $500,000 and Mr. Lomax converted $200,000 of outstanding loan principal to common stock. The transactions were priced at $0.83 per share, which represented the consolidated closing bid price on the NASDAQ Capital Markets exchange as of the close of the trading day immediately preceding these transactions.
"We are pleased to announce the conversion of $1.2 million of long term debt to common equity,” said Mark Roberson, PokerTek’s Acting Chief Executive Officer and Chief Financial Officer. “This transaction, along with the recently announced investment by ICP Electronics and the private placement, significantly strengthens our balance sheet as we position PokerTek for growth. As a result of these transactions, we have eliminated a majority of our outstanding long-term debt, reduced our future cash commitments, and enhanced our cash position.”
The certificates for the shares issued in connection with the debt conversion, which will be issued as promptly as practicable subject to NASDAQ approval, will bear a restrictive legend. PokerTek is relying on the “exempt security” provisions set forth in Section 3(a)(9) under the Securities Act of 1933, as amended, in issuing the shares in the debt conversion, as well as the transactional exemption provided by Section 4(6) of the Act. The shares of common stock issued in connection with the debt conversion represented approximately 11.7% of the Company’s total outstanding common shares immediately preceding the transaction.