Electronic Associates Inc, West Long Branch, New Jersey, now a humble computer systems integrator, says it raised $1.02m before expenses from its private placing of 1.2m units, and says the cash is needed for immediate working capital requirements; it adds that it may need about $1m of additional working capital during the second quarter. Each unit consists of one common share, one class A warrant entitling the holder to purchase one common share at $1, and one class B warrant entitling the holder to buy one common share at $1.75. The additional capital it may need in the second quarter could come from the exercising of the class A warrants. The warrants are not exercisable unless holders of two-thirds of the company’s shares approve a measure authorising it to issue additional common shares. Exercising of all or some of the warrants issued in the placing is likely to result in a change in ownership of the company and the loss of a significant portion of the company’s net operating loss carryforward that would otherwise be available to reduce any future taxable income, it said. The new investors already hold a 36% stake.
