WebMediaBrands Inc. Secures Additional Funding and Reduces Financing Charges
WebMediaBrands Inc. (Nasdaq: WEBM) today announced that it had obtained a $1,750,000 loan from Alan Meckler, the Company’s Chief Executive Officer, and that Mr. Meckler had agreed to reduce the effective interest on an existing loan to the Company by $480,000 per year. The new and existing loans bear interest at the fixed rates of 3.1% and 3.4% per annum, respectively, and both loans will mature in 2016. No principal payments are required on either loan until July 2014. The Company also issued stock options to Mr. Meckler to purchase one million shares of common stock. The stock options were issued under the Company’s existing 2008 stock option plan.
Don O’Neill, the Company’s Chief Financial Officer, stated: “These are very favorable transactions for the Company as we were able to secure financing at a low fixed interest rate and eliminate a charge on our existing financing that would have totaled $2,160,000 if that financing remained outstanding until maturity. The new options represent only minor dilution to shareholders as the Company recently purchased 770,000 shares of its common stock under its stock repurchase program. All shareholders will benefit from the Company’s enhanced cash position and the elimination of a financing charge that will help the Company to more quickly reach profitability.”
