By Laura Lutz
Des Moines, Jan. 29 - Converted Organics Inc. sold $5.5 million of notes in two private placements, according to an 8-K filing with the Securities and Exchange Commission.
In the one deal, United Organics Products, LLC bought a $1 million convertible note at par.
The United Organic convertible matures in three years and bears interest at 7% per year, payable monthly.
Beginning six months after Converted's acquisition of Waste Recovery Industries, LLC, it will be convertible into common stock at a price equal to the average closing price of the stock for the five trading days before conversion.
In another deal, three investors bought $3.5 million of discounted notes.
The discounted notes are priced at 90, mature in one year and bear interest at 10% per year.
Along with the discounted notes, the investors received a total of 750,000 class A warrants and 750,000 class B warrants. The class A warrants have a strike price of $8.25, and the class B warrants have a strike price of $11.00.
Within 75 days of closing, Converted Organics will seek shareholder approval to exchange the discounted notes for convertible notes. When the notes are exchanged, the investors will return half of the warrants to the company.
The new convertible notes will also bear interest at 10% per year.
The company agreed not to call any warrants until a registration statement for all of the warrants is declared effective.
Boston-based Converted Organics is focused on producing fertilizer and soil amendment products by recycling food waste.
| Issuer: | Converted Organics Inc.
|
| Pricing date: | Jan. 24
|
| Stock symbol: | Nasdaq: COIN
|
| Stock price: | $9.94 at close Jan. 24
|
|
|
| $1 million placement
|
| Issue: | Convertible note
|
| Amount: | $1 million
|
| Maturity: | Three years
|
| Coupon: | 7%
|
| Price: | Par
|
| Yield: | 7%
|
| Conversion price: | Average closing price of stock for five trading days before conversion
|
| Warrants: | No
|
| Investor: | United Organics Products, LLC
|
|
|
| $4.5 million placement
|
| Issue: | Discounted notes exchangeable into 10% convertible notes
|
| Amount: | $4.5 million
|
| Maturity: | One year
|
| Coupon: | 10%
|
| Price: | 90
|
| Warrants: | Class A for 750,000 shares; class B for 750,000 shares
|
| Warrant strike price: | $8.25 for class A; $11.00 for class B
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
