USA: Innovo And Investors Sign $1.7m Stock Agreement
Innovo Group Inc (Nasdaq: INNOC - news), a designer, manufacturer, marketer and distributor of various cut and sewn canvas and nylon consumer products for sale in the retail and premium markets, announced today that the company has signed a letter of intent with Third Millennium Properties, Inc; JAML, LLC and Innovation, LLC (collectively, the 'Investors') pursuant to which the Investors will purchase for cash $1.7m of common stock and warrants from the company.Jay Furrow, COO of Innovo, said: 'As the company continues to move forward, the proceeds will enable it to reduce the interest expense associated with factoring receivables, obtain more favorable terms with vendors and financial institutions, enhance product development and fund operations going forward. Furthermore, the cash infusion will help the company to comply with the requirements set forth by Nasdaq for the company's continued listing on the Nasdaq stock market.'Furrow added: 'This cash infusion, together with the commerce transaction, will complete our strategic plan of restructuring the company's manufacturing and distribution operations and strengthening it's capital structure. We are very pleased to have the opportunity to have the new investors as shareholders of the company.'The sale of the shares and warrants will be subject to shareholder approval and other terms and conditions. In an effort to ensure the company obtains the necessary net tangible asset levels required by Nasdaq, the chairman and CEO and other board members have agreed to vote their currently owned shares (approximately 2.4 million shares) in favor of the sales and the issuance of all the warrants. The stock will be priced at the lower of $1 or 80 per cent of the ten day average closing bid price prior to the closing of the transaction. One million seven hundred thousand warrants will be issued at $2.00 with a three-year term.
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