Ener1 will issue promissory note to fix default on debentures issued in 2004

By Sheri Kasprzak

New York, Aug. 11 - Ener1, Inc. agreed to issue a $750,000 promissory note and pay proceeds of $739,375 from the note to Satellite Asset Management LP to pay interest on defaulted senior secured convertible debentures issued in January 2004.

According to an 8-K filed by Ener1 with the Securities and Exchange Commission, the company did not make payments to Satellite totaling $1,549,750 as of July 31 required under the terms of the debentures.

The company issued $20 million in principal of the debentures on Jan. 20, 2004. The 5% debentures are due Jan. 21, 2009 and are convertible at $1.25 each.

The proceeds from the $750,000 note will pay the interest due on the debentures through Sept. 30, 2006.

The 10% note is due April 15, 2009 and if none of the debentures is outstanding, the investor may convert the principal of the note at $0.50 each.

Based in Ft. Lauderdale, Fla., Ener1 develops and markets technologies for lithium batteries and battery packs, fuel cell components and nanotechnology-based materials.

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