By Sheri Kasprzak
New York, Jan. 30 - NewGen Technologies, Inc. said it completed a $5 million private placement of convertible debentures with Cornell Capital Partners, LP.
The 10% debentures mature in three years and are convertible into shares at the lesser of $1.00 each or 80% of the lowest closing bid price for the five trading days before conversion.
NewGen may redeem the debentures, within three days' notice, assuming the company's stock is trading above $1.00. The notes are redeemable at 107% of the face value of the debentures plus interest.
Cornell has also received warrants for 1.125 million shares, exercisable for three years at $1.00 each.
So far, Cornell has funded $2.2 million of the proceeds. Of the rest, $650,000 will be funded two days before the company files a registration statement with the Securities and Exchange Commission and $2.15 million will be funded two days after the registration statement is declared effective.
Based in Charlotte, N.C., NewGen makes engines that produce cleaner emissions.
| Issuer: | NewGen Technologies, Inc.
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| Issue: | Convertible debentures
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| Amount: | $5 million
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| Maturity: | Three years
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| Coupon: | 10%
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| Price: | Par
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| Yield: | 10%
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| Conversion price: | $1.00
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| Warrants: | For 1.125 million shares
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| Warrant expiration: | Three years
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| Warrant strike price: | $1.00
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| Investor: | Cornell Capital Partners, LP
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| Settlement date: | Jan. 24
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| Stock symbol: | OTCBB: NWGN
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| Stock price: | $2.00 at close Jan. 24
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