Units consist of a series B1 preferred and one warrant sold at $1.56
By Devika Patel
Knoxville, Tenn., May 10 – Vertex Energy Inc. arranged a private placement of its 6% series B1 convertible preferred stock to raise about $19.3 million on May 10, according to an 8-K filed Tuesday with the Securities and Exchange Commission. Craig-Hallum Capital Group LLC is the agent.
The company will sell about 12.4 million units of one preferred and one warrant at $1.56 per unit.
Each preferred is convertible into one common share at $1.56 per share, a 1.27% discount to the May 9 closing share price of $1.58.
The preferreds mature on June 24, 2020. They may be redeemed at 110 beginning June 20, 2017. The company may force conversion if its common stock trades at or above $3.90 per share, 250% of the unit price, for 20 consecutive trading days at any time following the earlier of (a) the effective date of the resale registration statement or (b) six months after the closing of the offering.
In any case, the preferreds may not be redeemed unless amounts outstanding under the company’s credit agreement have been paid in full.
The warrants are exercisable at $1.53 for 66 months. The strike price reflects a 3.17% discount to the May 9 closing share price.
Chief executive officer and chairman Benjamin P. Cowart and chief financial officer and secretary Chris Carlson each agreed to purchase 32,052 units for $50,000.
Settlement is expected May 13.
A total of $11.2 million of the proceeds will be used to repurchase and retire about 3.6 million series B preferred shares. From the remaining proceeds, the company has agreed to pay its scheduled second-quarter loan amortization of $800,000, and the remainder will be used for working capital purposes and potential acquisitions.
Based in Houston, Vertex provides services designed to aggregate, process and recycle industrial and commercial waste streams.
| Issuer: | Vertex Energy Inc.
|
| Issue: | Units of one series B1 convertible preferred share and one warrant
|
| Amount: | $19.3 million (approximate)
|
| Units: | 12.4 million (approximate)
|
| Price: | $1.56
|
| Maturity: | June 24, 2020
|
| Conversion ratio: | One common share per preferred
|
| Dividends: | 6%
|
| Call option: | At 110 beginning June 20, 2017
|
| Warrants: | One warrant per unit
|
| Warrant expiration: | 66 months
|
| Warrant strike price: | $1.53
|
| Agent: | Craig-Hallum Capital Group LLC
|
| Investors: | Benjamin P. Cowart (for $50,000) and Chris Carlson (for $50,000)
|
| Pricing date: | May 10
|
| Settlement date: | May 13
|
| Stock symbol: | Nasdaq: VTNR
|
| Stock price: | $1.58 at close May 9
|
| Market capitalization: | $43.74 million
|
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