Ailing online real estate technology and services provider HomeSeekers.com
effectively gave control of the company to privately held
E-Home.com Inc. (also known as HomeMark) in exchange for a $20 million equity
investment.
HomeSeekers, its stock price trading at 65 cents a share at mid-morning, had
reported a loss of $14.7 million or 45 cents per share for its third quarter
ending March 31. The company had lost $15.6 million in its first two fiscal
quarters, and has never posted a profitable quarter.
The company had said in its 10Q filing on May 15 that it would not be able to
continue to operate unless financing was obtained.
HomeMark agreed to buy, in a series of transactions scheduled from July 2001
through March 2002, five million shares of preferred stock at $4 per share.
Concurrent with the stock deal, HomeMark entered into short-term loan
agreements and will advance Reno, Nev.-based HomeSeekers up to $2 million.
As part of the deal, four new members will join the HomeSeekers board, all
recommended by HomeMark, including Joseph Harker, chief executive officer of
HomeMark.
The preferred stock shares are each convertible into 20 shares of
unregistered common stock after a period of 24 months, for a total of 100
million shares of common stock and at that time would represent an ownership
stake in the company of about 61 percent. However, HomeSeekers may redeem the
preferred stock at any time prior to conversion at a cash price of $4 per
share.
Each share of preferred stock will be entitled to immediate voting rights of
20 shares of common stock, representing a current voting interest of
approximately 68 percent or, in effect, control of the company.
In addition to the cash purchase price, HomeMark will assign and contribute
to capital $80 million of prepaid advertising owned by HomeMark in a national
print publication, or an additional $16 per share for the preferred stock.
HomeSeekers provides technology solutions and services targeted to real
estate brokers, agents, Multiple Listing Services (MLS), builders, consumers
and others involved in the real estate industry.
HomeSeekers Gets Cash Infusion
