By Devika Patel
Knoxville, Tenn., Sept. 18 - MTI MicroFuel Cells Inc. settled a $2.2 million private placement of 10% convertible promissory notes, according to an 8-K filed Thursday with the Securities and Exchange Commission by parent company Mechanical Technology, Inc.
The company took in $1.5 million plus $700,000 in converted debt.
The note will automatically convert into series A preferred shares upon completion of MTI Micro's next equity financing for at least $3.5 million. The conversion price will be equal to the price per share of that financing.
If the financing doesn't occur by the notes' maturity date, March 31, 2009, the notes will convert into preferreds at an agreed-upon value.
The investors will also receive warrants to purchase securities issued in the next equity financing. The per-share exercise price will be the per share price at which securities are sold in the financing or negotiated conversion, as applicable.
The warrants will expire in five years, but may expire earlier under certain circumstances.
Based in Albany, N.Y., Mechanical Technology develops cordless portable power systems. MTI is its private subsidiary.
Issuer: | MTI MicroFuel Cells Inc.
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Issue: | Convertible promissory notes, convertible into series A preferreds
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Amount: | $2.2 million
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Maturity: | March 31, 2009
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Coupon: | 10%
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Price: | Par
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Yield: | 10%
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Warrants: | Yes
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Warrant expiration: | Five years
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Settlement date: | Sept. 18
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