SOURCE: Broadcast International, Inc.
SALT LAKE CITY, UT--(Marketwire - Jul 17, 2012) - Broadcast International (OTCBB: BCST), a leading provider of video-powered broadcast solutions, closed the sale of $1.9 million in senior secured convertible promissory notes. $900,000 of near-term debt, due in November 2012, was exchanged for the notes. The offering provides $923,000 in net cash proceeds, which the company plans to use for general corporate purposes and working capital.
The notes bear an annual interest rate equal to 12% and the cash interest is payable at maturity on July 13, 2013. The notes are convertible into shares of Broadcast International common stock at a conversion price of $0.25 per share. As part of the offering, the company issued to the purchasers of the notes warrants to purchase up to 3,800,000 shares of Broadcast International common stock at a price of $0.25 per share.
"We are encouraged by the participation and support we received from existing shareholders in this offering," said Jim Solomon, CFO of Broadcast International. "The funding allows us to more aggressively capitalize on the growing market opportunities for Over-the-top (OTT) video broadcasting solutions, as well as monetize our robust patent portfolio and further penetrate our existing customer base."
Steve Jones, general manager of Broadcast's CodecSys division, added: "From a product perspective, this funding enables us to accelerate the commercialization of key CodecSys modules in the OTT marketplace. With CodecSys' dynamic architecture and modular design, we can add more functionality in a fraction of the time and at significantly less cost than our competitors with closed, hardware-based technology."
Coinciding with the funding, President Rod Tiede stepped down as CEO, effective July 16, 2012, to create an opportunity for the board of directors to recruit a seasoned executive with direct experience in taking video-based technology companies to the next level of growth. Tiede has assumed the additional position of general manager of BI Networks, the company's managed media services division.
William Boyd, chairman of Broadcast International, commented: "We are grateful to Rod for bringing CodecSys to this pivotal stage of its development while successfully growing our BI Networks division, and we look forward to bringing on new leadership to build upon our strong foundation. We expect to appoint a new CEO before the end of the year. Meanwhile, our BI Networks division will benefit from Rod's more focused leadership in what remains an important and growing component of our business."
The board of directors has formed an executive committee composed of Chairman William Boyd and directors Mark Spagnolo and Don Harris to assist management until a new CEO is appointed.
Management plans to further discuss these developments on its upcoming second quarter 2012 earnings podcast planned for August.
About Broadcast International
Broadcast International is a leading provider of video-powered broadcast solutions, including IP, digital satellite, Internet streaming and other types of wired/wireless network distribution. BI's patented CodecSys software is a breakthrough, multi-codec video compression technology that cuts video bandwidth requirements over satellite, cable, IP and wireless networks. By slashing bandwidth needs, CodecSys enables a new generation of rich-media applications and offers unprecedented price/ performance benefits for existing applications. Broadcast International is a public company (OTCBB: BCST) headquartered in Salt Lake City, UT.
For more information visit: www.brin.com and www.codecsys.com.