According to a press release issued today, Care Concepts will own roughly 40 percent of General Media’s non-voting stock as soon as the publisher emerges from bankruptcy next week.
Under the new purchase agreement, PET Capital Partners Inc., the company that owned General Media’s debt, will retain voting common stock and a majority of the total common stock equity of the company. PET’s Marc H. Bell and Daniel C. Staton will assume the day-to-day operations of the magazine.
Care Concepts will be allowed to designate one member on the General Media board of directors.
Care Concepts financed the recent acquisition of General Media by issuing new preferred stock and convertible notes in the amount of roughly $16.4 million, the release stated.
This is convertible into more than 70 million new shares of common stock sometime within the next five years.
Currently, the company has 15.7 million outstanding shares of common stock.
The new securities will not and have not been registered under the Securities Act of 1933.
Care Concepts’ announcement came following a stormy month for the company, which was forced to delay its acquisition of payment processor iBill and had its stock delisted from the American Stock Exchange for a variety of public-interest concerns.
The announcement was met with steeply falling prices today as the stock’s volume on the market more than quadrupled and its price fell nearly 25 percent during the first two hours the market was open, setting a new 52-week low at 71 cents.
The stock was trading at $6 less than a month ago.