Vu1 defaults on $1.44 million of original-issue discount convertibles

Company failed to pay off debentures at maturity on June 22, 2013

By Devika Patel

Knoxville, Tenn., June 27 - Vu1 Corp. is in default on its original-issue discount convertible debenture, according to an 8-K filed Thursday with the Securities and Exchange Commission. The debentures were sold in a $4.12 million private placement on June 22, 2011 and were due on June 22, 2013.

The company did not make the required payment on $1.44 million of debentures on the maturity date, causing the default.

As a result, Vu1 is liable for a 10% additional penalty, which equals $144,121. It is also liable for all other amounts, costs, expenses and liquidated damages due under the debentures. The remaining debentures will accrue interest at an 18% default rate.

The investors may also exercise their remedies under the debenture terms. The company said it is in negotiations with the investors, seeking a limited extension. It said it does not have sufficient financial resources and is seeking to arrange financing to pay the amount due.

New York-based Vu1 is focused on developing and selling a line of mercury-free, energy-efficient light bulbs based on its proprietary light-emitting technology.

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