American Restaurant Concepts Announces Debt Conversion By Blue Victory Holdings
By PR Newswire, November 06, 2013, 08:30:00 AM EDT
LAFAYETTE, La., Nov. 6, 2013 /PRNewswire/ -- American Restaurant Concepts, Inc. (OTCBB:ANPZ), operator and franchisor of the award-winning Dick's Wings & Grill® restaurants, announced today that Blue Victory Holdings, Inc. has elected to convert all of the Company's outstanding debt into shares of common stock.
The Company entered into a credit facility with Blue Victory Holdings, Inc. on September 13 through which the Company can borrow up to $1 million on a revolving basis for general working capital purposes. Borrowings under the credit facility are unsecured, may be prepaid and re-borrowed without penalty, and bear interest at an annualized rate of 6%. Blue Victory has the right to convert all outstanding principal and accrued interest under the credit facility into shares of the Company's common stock. A total of $415,316 in loans made to the Company by Blue Victory prior to September 13 was incorporated into the credit facility.
As of November 5, the Company had $475,626 of principal and interest outstanding under the credit facility. Blue Victory elected to convert all of the principal and interest into shares of the Company's common stock at an effective conversion price of $1.95 per share. Accordingly, Blue Victory will be entitled to receive 243,911 restricted shares of common stock, which it intends to have issued directly to the 50 long-term, accredited investors that comprise its minority shareholder base. All price and share numbers reflect the recently completed 1-for-7 reverse stock split completed by the Company on November 4.
"The decision by Blue Victory to convert our debt into stock is a big endorsement for us," stated Richard Akam, CEO of American Restaurant Concepts. "This debt conversion shows the support Blue Victory has for our growth plan and the progress we have made to date in executing upon it. The debt conversion is also important because we now have the financial flexibility that we need to complete the next stage of our growth strategy. We are pursuing several major transactions that will diversify American Restaurant Concepts into other restaurant brands. We intend to use our credit facility with Blue Victory to help finance these deals."
This debt conversion represents the second debt settlement completed by the Company this month. On November 1, the Company issued a total of 200,000 pre-split shares of common stock (28,572 post-split shares) to the holders of the promissory note originally issued to The Carl Collins Trust in January 2012 in settlement of a total of $55,000 of principal and accrued interest. Earlier this year, the Company paid Bank of America$50,000 in settlement of $370,000 of principal, accrued interest and other amounts due under the October 2008 loan agreement. The Company has now settled a total of $900,626 of debt during 2013, representing virtually all of its outstanding debt.
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