Small World Kids gets financing
Staff -- Kids Today, 11/1/2006 12:00:00 AM
Small World Kids, Inc. announced it has raised $2 million to fund working capital in support of fourth quarter sales for the Holiday season. Additionally, the company announced it already has won more than two dozen national awards from industry organizations for its 2006 products.
"The new financing of $2 million along with the $2.7 million in new equity and the restructuring of debt that we announced in June 2006 completes our goal of recapitalizing the Company,” said Debra Fine, president/CEO of Small World Kids, Inc. The $2 million raised is comprised of several components.
The breakdown is:
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Fine and her husband Russell Fine, as trustees of the Fine Family Trust and Vintage Filings, Inc., purchase in a private placement 181,818 shares of its Class A-1 Convertible Preferred Stock (the “Preferred Shares”) for $200,000.
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The Company issued an aggregate of $330,000 in principal amount of 10% Convertible Debentures (the “Debenture”) to Hong Kong League Central Credit Union and Kershaw Mackie & Company with net proceeds of $300,000.
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The Company’s senior lender, Laurus Master Funds, Ltd., entered into an agreement with the Company to increase the loan allowed on its Senior Facility with the Company from the $750,000 already outstanding to $1.5 million for a one-year period, subject to certain restriction.
The company has also won approximately 25 awards for its 2006 products.
Following is a summary of the awards announced so far:
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Four 3-star ratings, (the highest given), from the Canadian Toy Testing Council (plus 2 other lesser ratings) [IQ Baby Whose House, Ryan’s Room Li’l Firestoppers Big Red Truck, Battle Paddle, Knock Knock Blocks]
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ASTRA Top 20 Toys [three Chunky Puzzles]
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The National Parenting Center [Farm Animal Friends, Pets Sound Maker Puzzles]
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Dr. Toy Smart Toy/Smart Play [Eric Carle Polar Bear Touch ‘n Stack Blocks]
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Parents' Choice Foundation [Active Edge Solo Chinese Jump Rope]
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Creative Child, three awards [Neurosmith Storytime with Peter Rabbit Book of the Year award for the Toddler Soft Books category, and Eric Carle Very Hungry Caterpillar Toy of the Year Finalist for the Plush Toys for Babies category and Mondo Glitter Gertie Ball Seal of Excellence for Indoor/Outdoor toys]
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NAPPA (National Parenting Publications of America) [Ryan’s Room Stable for Two won a Gold Award and Eric Carle Very Hungry Caterpillar won an Honors award]
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Mr. Dad Seal of Approval , two awards out of the Top 10 [Eric Carle Polar Bear Touch ‘n Stack Blocks and Active Edge Instant Replay Batter]
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Oppenheim Toy Portfolio 2007 Blue Chip Classic Award for Gertie Ball
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TD Monthly Best Sellers List [Soft Sprinkles Tide Pool, Geyser Blast Water Sprinkler, Neurosmith Jumbo Music Block, Virtual Speed Baseball, Gladiator Set, Magical Sword
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Parenting Magazine Toy of the Year [ages 1½ to 3 years for Eric Carle Polar Bear Touch ‘n Stack Blocks]
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iParenting Media Awards Excellent Products Award [Eric Carle Polar Bear Touch ‘n Stack Blocks]
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Fit Pregnancy Toy of the Year [Eric Carle Very Hungry Caterpillar]
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Child magazine Toy of the Year [Active Edge Instant Replay Batter]
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Working Mother Toy of the Year [Bug in a Garden Bead Path]
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Nick Jr. Best Toys [Eric Carle Mixed-Up Chameleon Maze Board]
The company also announced that John Matise, the COO, will be reducing his involvement with the company to a part-time basis (approximately 25%) through the end of the year. Matise has served as COO since March 27, 2006 and was a director of the company from 2004 until 2006 when he became the COO. He has joined Stone Canyon Venture Partners, LP as a managing director. Stone Canyon Venture Partner, LP is a Beverly Hills based venture capital investment firm that invests $4-6 million in U.S. based growth oriented businesses.
Matise has partnered with the management team in completing the following restructuring and recapitalizing events in 2006: (i) a $16.5M senior revolver and $2.0 million senior term with Laurus Master Funds in February 28, 2006; (ii) the sale of $2.7 million in Class A-1 Preferred stock on June 9, 2006; (iii) the conversion of $3 million in debt to Class A-1 Convertible Stock; (iv) the extension of the maturity date from 2006 to 2008-2011 of $2.25 million in debt with St. Cloud Capital Partners; and (v) the funding announced in this press release.
“Working with John as both a Board member and as COO has been a pleasure and I wish him the very best with Stone Canyon Venture Partners,” Fine said. “John has graciously agreed to work with the company part time during the next three months to insure a smooth transition of his duties.”
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