VISTA, Calif., March 3, 2014 /PRNewswire/ -- Eco Building
Products, Inc., (OTCQB: ECOB) announced that on February 14, 2014 the Company has entered into a
Loan Agreement (the "Loan Agreement") with an institutional
investor (the "Lender") providing for a loan (the "Loan") in an
aggregate principal amount of $500,000 (the "Purchase Price"). In
connection with the Loan Agreement, the Company issued a Secured
Promissory Note (the "Secured Note") in exchange for the Purchase
Price. The Secured Note has an interest rate per day equal to 0.1%
and a maturity date of May 14, 2014.
The Company has the option to prepay all or any portion of the
Purchase Price; however, the prepayment amount must be in an amount
not less than $25,000. Pursuant
to the Loan Agreement, the Company has agreed to direct The Home
Depot, Inc. to make payment of all amounts due under current
purchase orders directly to the Lender. In the event the Secured
Note is not repaid on the Maturity Date, then the Lender, in its
sole discretion, may exchange the Secured Note for a 10% Senior
Secured Convertible Debenture (the "Convertible Debenture").
The Convertible Debenture is due on demand, has an interest
rate of 10% per annum and the Lender has the right to convert the
Debenture in shares of the Company's common stock, par value
$0.001 per share (the "Common Stock")
at any time at a conversion price equal to 50% of the lowest
trading price of the Company lowest trading price of the Common
Stock quoted by Bloomberg L.P. for the 20 trading days immediately
preceding the applicable conversion notice (the "Debenture
Conversion Price"). The Debenture Conversion Price is subject to
adjustment in the case of stock splits, stock dividends,
combinations of shares and similar recapitalization transactions
and any issuances of securities below the Debenture Conversion
Price. The Company also granted the Lender a security interest in
certain Company assets to secure the repayment of the Secured Note
under a Security Agreement that was executed in connection with the
Loan Agreement.
$675,000 Series B Preferred
Stock Financing
On February 26, 2014, the Company
entered into a Securities Purchase Agreement (the "Purchase
Agreement") with an institutional investor (the "Investor")
providing for the issuance and sale by the Company (the "Offering")
of 6,750 shares of the Company's Series B 12% Convertible
Preferred Stock, par value $0.001 per
share (the "Preferred Stock"), for a purchase price of $675,000 (the "Financing") which are convertible
into shares of the Company's common stock (the "Common
Stock"). The closing of the sale of these securities
took place on February 27, 2014 (the
"Closing").
Subject to certain ownership limitations as described below,
shares of Preferred Stock are convertible at any time at the option
of the holder into shares of Common Stock (the "Conversion Shares")
at a conversion price equal to 60% of the lowest VWAP during the 20
trading day period immediately prior to the applicable conversion
date, subject to adjustment (the "Conversion Price"). The shares of
Preferred Stock are convertible into Common Stock by dividing the
Stated Value (defined below) of such share of Preferred Stock by
the Conversion Price. The Conversion Price is subject to adjustment
in the case of stock splits, stock dividends, combinations of
shares and similar recapitalization transactions and any issuances
of securities below the Conversion Price. Subject to limited
exceptions, holders of shares of Preferred Stock will not have the
right to convert any portion of their Preferred Stock if the
holder, together with its affiliates, would beneficially own in
excess of 4.99% of the number of shares of the Company's common
stock outstanding immediately after giving effect to its
conversion.
In connection with the Financing, the Company agreed to file an
Information Statement on Schedule 14C with the SEC and any other
necessary paperwork with the State of
Colorado to increase its authorized shares of common stock
to 10,000,000,000 shares. As of the date hereof, the Company
has reached its current authorized common stock amount of
2,000,000,000 shares. Shares of Preferred Stock have a liquidation
preference equal to the stated value of each share of Preferred
Stock or $100 per share (the "Stated
Value") plus any accrued and unpaid dividends thereon and any other
fees or liquidated damages then due and owing. The shares of
Preferred Stock do not have any voting rights other than if the
Company seeks to alter or adversely affect the rights of the
Preferred Stock.
"The additional financing allows the Company the financial
ability to quickly deploy the initial inventory set of our 104 Home
Depot store expansion. As the Northeastern region thaws out we
anticipate an explosive building season and Eco Building Products
wants to be able to capture significant growth with our retail
partner. We intend to increase revenues providing the Company the
ability to service the additional financing and minimize
dilution," stated Steve Conboy, President/CEO, Eco
Building Products, Inc.
About Eco Building Products, Inc.
Eco Building
Products, Inc. is a manufacturer of treated wood products that are
protected against fire, mold/mycotoxins, fungus, rot-decay, wood
ingesting insects and termites by our proprietary eco-friendly
chemistry utilizing ECOB WoodSurfaceFilmâ„¢ and FRCâ„¢ technology (Fire
Retardant Coating). Eco Building products, "Eco Red Shield" utilizing patent
pending technology is the ultimate in wood protection,
preservation, and fire safety to building components constructed of
wood; from joists, beams and paneling, to floors and ceilings.
Safe Harbor Statement: This press release may contain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Act"). In
particular, when used in the preceding discussion, the words
"believes," "expects," "intends," "plans," "anticipates," or "may,"
and similar conditional expressions are intended to identify
forward-looking statements within the meaning of the Act, and are
subject to the safe harbor created by the Act. Any statements made
in this news release other than those of historical fact, about an
action, event or development, are forward-looking statements.
Forward looking statements involve known and unknown risks and
uncertainties, which may cause the Company's actual results in
future periods to be materially different from any future
performance that may be suggested in this release. ECOB takes no
obligation to update or correct forward-looking statements, and
also takes no obligation to update or correct information prepared
by third parties.
Company Contact
Eco Building Products,
Inc.
Phone: 1 888 Red Shld (888.733.7453)
Email: info@ecob.net
Web Site: www.ecob.net
Investor Relations Contact
Arthur Douglas & Associates, Inc.
Arthur Batson
Phone: 407-478-1120
SOURCE Eco Building Products, Inc.