By Devika Patel
Knoxville, Tenn., July 25 - Valcent Products Inc. took in $2.17 million in a private placement of secured convertible promissory notes on July 21, according to an 8-K filed Friday with the Securities and Exchange Commission.
The notes have a face value of $2.43 million. The difference in principal and price reflects the notes' interest rate, the company said in the filing.
They mature on July 16, 2009. At maturity, the outstanding principal plus 30% will be due.
The notes may be converted into common shares at $0.51 per share. However, after Jan. 16, 2009, the conversion price will equal the lesser of $0.51 (unless the conversion price has been adjusted) and 70% of the average of the five lowest closing bid prices of Valcent's common stock for the 10 trading days prior to the conversion date.
The notes may be prepaid with a fee of 30%.
The company's chief financial officer bought one note for $188,160.
Each investor also received two five-year warrants, with one of the warrants redeemable by the company and the other non-redeemable. The warrants may be exercised on a cashless basis and their strike prices may be adjusted.
The non-redeemable warrants are exercisable for 4,761,098 shares at $0.55 per share and the redeemable warrants are exercisable for 2,380,550 shares at $0.75 per share.
The redeemable warrants may be redeemed by the company under certain circumstances.
Proceeds will be used for general working capital and debt repayment.
Located in El Paso, Texas, Valcent develops skin-care products.
| Issuer: | Valcent Products Inc.
|
| Issue: | Secured convertible promissory notes
|
| Amount: | $2,428,160
|
| Maturity: | July 16, 2009
|
| Coupon: | 0%
|
| Price: | $2,168,000
|
| Yield: | 0%
|
| Conversion price: | $0.51 up to Jan. 16, 2009; the lesser of $0.51 (unless the conversion price has been adjusted) and 70% of the average of the five lowest closing bid prices of Valcent's common stock for the ten trading days prior to the conversion date after Jan. 16, 2009
|
| Warrants: | For 7,141,648 shares
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.55 (for 4,761,098 shares), $0.75 (for 2,380,550 shares)
|
| Settlement date: | July 21
|
| Stock symbol: | OTCBB: VCTPF
|
| Stock price: | $0.57 at close July 21
|
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