The Miami Shores-based lender, a publicly traded originator of forward and reverse mortgages, contested a move by Fennell Avenue, a Grand Cayman, Cayman Islands-based investor, to convert a debenture in exchange for 1.14 million shares of stock in America's Senior.
Under terms of the agreement, the Miami Shores lender agreed to issue 1.25 million shares of its common stock in exchange for $1.15 million in debt that Fennell held through the debenture. The terms filed in the U.S. District Court, South District of New York, restrict how much stock Fennell may sell on any given day. Fennell also received right of first refusal to meet terms for a period of one year on certain debt financing that America's Senior might propose.
In a shareholder's report, the Miami Shores firm estimated the settlement would result in a non-recurring gain in excess of $750,000. Including the gain, the company now expects to post a profit of about $1.3 million for the year ended Dec. 31, 2000.
"This significant turnaround would clearly demonstrate the results of last year's consolidation and growth plan," Nelson Locke, America's Senior chief executive officer, says in the shareholder's statement. "These projected results do not include any contribution from the acquisition candidates we are currently considering."
The firm last reported a net loss of $1.5 million, or a loss of 16 cents a share, on revenue of $4.9 million for the nine months ended Sept. 30, 2000, compared with a net loss of $5.3 million, or a loss of 80 cents a share, on revenue of $3 million for the same period in 1999.
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