Salt Lake City, UT – May 9, 2006 – UCN, Inc. (OTC.BB:UCNN), announced today that the Company entered into a revolving credit and term loan agreement with ComVest Capital on May 5, 2006. Under the terms of the agreement ComVest has agreed to loan up to $7.5 million under a revolving credit note and $4.5 million to the Company under a convertible term note. The term note is convertible to common stock at the rate of $3.00 per share. UCN can require conversion subject to the satisfaction of certain conditions.
In connection with the establishment of the loan, the Company agreed to issue to ComVest a warrant to purchase 330,000 shares of UCN common stock at the lesser of $2.75 per share or 130% of market at the time of closing. The loan transaction is expected to fund on or before June 1, 2006.
The new loans will replace:
the revolving credit facility with CapitalSource,
the promissory notes issued in conjunction with the MyACD and Transtel acquisitions, and
the capital lease used to finance the upgrade of the Company’s billing software.
The interest rate under the ComVest convertible term note and revolving credit note is a fixed nine percent per annum. Interest on the convertible term note is paid monthly in arrears. No principal is paid during the first 12 months, after which it is paid in 36 equal monthly installments.
The significant highlights of the new financing are the following:
Provides a four-year fixed interest rate of nine percent
Improves current ratio from .77 to 1.05 based on first quarter balances
Increases the borrowing base available from accounts receivable
Allows for no principal payments for the first twelve months
Moves all of the current line of credit balance to long-term
Reduces debt payments by $4.3 million over the next two years
Paul Jarman, UCN CEO, said: “The resulting stronger balance sheet improves our ability to close significant accounts, enhances our ability to attract key distribution partners, and creates additional cost savings opportunities with our wholesale suppliers.”
About UCN, Inc.
UCN (OTCBB: UCNN) is a provider of contact handling software services, and business data and voice services delivered over its national VoIP network. The inContact™ suite of products includes an integrated package of advanced contact handling, reporting and administration applications and inControl™, a unique, rapid application development tool. To learn more about UCN