Spa Chakra, Inc., a global luxury spa network, announced today that it is proceeding towards a sale of substantially all of its assets to Hercules Technology Growth Capital (Nasdaq: HTGC), the leading specialty finance company providing venture debt and equity to venture capital and private equity-backed technology and life science companies at all stages of development. As part of the process to successfully complete the sale, Spa Chakra also announced today that it has filed for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for New York. As part of the filing, Spa Chakra has arranged for immediate financing from Hercules, which will be used by Spa Chakra to fund normal business operations during the sale process.
'Spa Chakra and Hercules have had an incredibly effective working relationship since 2008 and both parties agree that this current transaction is a fantastic opportunity for the successful operations of the business. The mechanics of the transaction will have no impact on the day-to-day operations of Spa Chakra -- with the immediate financial backing of Hercules, Spa Chakra will continue to provide the highest quality spa services for our clients at our prominent spa locations worldwide,' said Michael Canizales, founder and chief executive officer of Spa Chakra, Inc.
'Having worked with and provided additional financing to Spa Chakra for the last two years, Hercules recognizes the investment potential that Spa Chakra represents,' said Manuel A. Henriquez, co-founder, chairman and chief executive officer of Hercules. 'Because of this potential, we have decided to continue to support and provide additional financing, so that Spa Chakra could have immediate liquidity while we move forward with the anticipated acquisition. Uniquely positioned in the marketplace, Spa Chakra has developed a strong network of luxury spas worldwide and leading high-end luxury cosmetic brands that we believe position the company for future growth post the Chapter 11 reorganization. We are confident that the company will continue to execute its growth strategy and anticipate that Spa Chakra, shortly after emerging from its reorganization, will swiftly return to profitability.'
About Spa Chakra, Inc.:
Initially founded in 1998 in Australia, Spa Chakra has continued to expand both domestically and overseas, and is currently recognized as one of the top spa operators in the world. Spa Chakra provides its clients with comprehensive health and wellness care in an environment that integrates conventional and holistic methods with a definitive sensorial experience.
About Hercules Technology Growth Capital, Inc.:
Hercules Technology Growth Capital, Inc. is a NASDAQ traded specialty finance company providing debt and equity growth capital to technology and life science companies at all stages of development. Founded in December 2003, the company primarily finances privately held companies backed by leading venture capital and private equity firms. Hercules invests in a broad range of ventures active in technology and life science industries and offers a full suite of growth capital products at all levels of the capital structure. The company is headquartered in Palo Alto, Calif. and has additional offices in the Boston, Boulder and Chicago areas. Providing capital to publicly-traded or privately-held companies backed by leading venture capital and private equity firms involves a high degree of credit risk and may result in potential losses of capital.