The $5 million was advanced by Lenfelt shortly before this January press release. It's the $5 million for which he was issued the dividend paying preferred shares.
January 18, 2012 - (Mount Laurel, NJ) TelVue® Corporation (OTCQB: TEVE), a leader in IP Television Broadcasting and Internet Video Streaming, announced today that it had executed an agreement with H.F.“Gerry” Lenfest, its Chairman and majority stockholder, under which approximately $30.6 million in debt and accrued interest held by Mr. Lenfest would be converted into TelVue common stock and new preferred stock.
The agreement is subject to certain conditions, including stockholder approval of the agreement itself as well aschanges to TelVue’s authorized capital stock and other matters. Under the terms of the agreement, a promissory note recently issued to Mr. Lenfest in the principal amount of
$5.0 million, which was designed to provide funding for development, would be converted into a new class of redeemable convertible preferred stock, with a conversion price of $0.35 per share.
The new class of preferred stock would have an annual dividend of 4% payable in cash or in kind, at TelVue’s option. Under the terms of the agreement, the remaining debt and accrued interest through the effective date would be converted into common stock at a price per share of $0.35.
Pending stockholder approval, the agreement will eliminate all of the Company’s outstanding debt to Mr.
Lenfest. TelVue plans to hold a stockholder vote to approve required elements of the transaction.
“This agreement represents a major step forward for TelVue,” said Jesse Lerman, TelVue’s President and CEO,
“We believe that, pending stockholder approval, the Company’s balance sheet, fortified with the recent $5.0
million funding and debt conversion, provides TelVue with a solid foundation for expansion of its current
broadcast products and services and will assist in establishing TelVue as the provider of choice in the rapidly
growing area of cloud-based video services.”
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