Converted Organics Announces Financing Transaction, Providing the Company With $3.75 Million Immediately, and Potentially an Add
December 20 2010 - 12:35PM
Converted Organics Inc. (Nasdaq:COIN) announced today that it has
closed on a financing transaction with select institutional
investors wherein it has agreed to sell convertible notes and
warrants, the sale of which provides the Company with an immediate
$3.75 million in cash before expenses, and potentially an
additional $1.0 million upon meeting certain conditions of the
transaction, including holding a Special Meeting of Stockholders by
February 28, 2011.
Under the terms of the transaction, the Company agreed to sell
to the investors convertible notes in the aggregate original
principal amount of $4,990,000, such notes to be purchased in two
tranches. The first tranche, which the Company completed on
December 17, 2010, involved the sale of notes in the aggregate
original principal amount of $3,939,473.68 for a purchase price of
$3,750,000 ("Initial Notes") ("Initial Closing"), and the second
tranche will involve the sale of notes in the aggregate original
principal amount of $1,050,526.32 for a purchase price of
$1,000,000 and shall be consummated upon the satisfaction of the
certain closing conditions ("Additional Notes") ("Additional
Closing"), including the receipt of shareholder approval as
discussed below. The Company is required to repay the Initial
Notes in six equal monthly installments either in cash or in shares
of common stock commencing February 1, 2011. The notes are
convertible into shares of common stock at a conversion price of
$1.00 per share.
For complete details on the transaction, including the details
of the note and the warrants please see the form 8-K filed December
17, 2010.
Converted Organics has agreed to hold a shareholder meeting by
February 28, 2011 to approve: (A) the issuance of greater than
19.99% of the Company's shares of common stock pursuant to the
notes and Series B Warrants, (B) the adjustment of the exercise
price of the Series A and Series C Warrant below their floor
prices, and (C) issuance of the Additional Notes and associated
warrants; and (D) the elimination of the temporary floor price in
the Class G warrants held by one of the investors in the
offering.
"We are pleased that institutional investors have decided to
support our efforts to restructure the Company allowing us to put
the Company in a position to thrive and grow in an exciting
intersection of three dynamic interrelated
environmentally-responsible business opportunities: Agriculture,
Waste, and Water," said Edward J. Gildea, President and CEO of
Converted Organics. Gildea continues, "The Company controls
cutting edge vertical farming growth technologies, sustainable
organic fertilizers, and technology to clean contaminated water and
this financing will help us deliver on the promise these businesses
offer."
The notes and warrants were issued pursuant to a currently
effective shelf registration statement on Form S-3. Chardan
Capital Markets, LLC, as placement agent, acted on a best efforts
basis for the offering.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such state.
About Converted Organics Inc.
Converted Organics (Nasdaq:COIN) (www.convertedorganics.com),
based in Boston, MA, is dedicated to producing high-quality,
all-natural, organic soil amendment and fertilizer products through
food waste recycling. The Company uses its proprietary High
Temperature Liquid Composting (HTLC) system, a proven,
state-of-the-art microbial digestion technology, to process various
biodegradable food wastes into dry pellet and liquid concentrate
organic fertilizers that help grow healthier food and improve
environmental quality. Converted Organics sells and distributes its
environmentally-friendly fertilizer products in the retail,
professional turf management, and agribusiness markets.
The Converted Organics Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=7431
This press release contains forward-looking statements that are
subject to risks and uncertainties. These forward-looking
statements include information about possible or assumed future
results of our business, financial condition, liquidity, results of
operations, plans and objectives. In some cases, you may identify
forward-looking statements by words such as "may," "should,"
"plan," "intend," "potential," "continue," "believe," "expect,"
"predict," "anticipate" and "estimate," the negative of these words
or other comparable words. These statements are only predictions.
One should not place undue reliance on these forward-looking
statements. The forward-looking statements are qualified by their
terms and/or important factors, many of which are outside the
Company's control, involve a number of risks, uncertainties and
other factors that could cause actual results and events to differ
materially from the statements made. The forward-looking statements
are based on the Company's beliefs, assumptions and expectations of
our future performance, taking into account information currently
available to the Company. These beliefs, assumptions and
expectations can change as a result of many possible events or
factors, including those events and factors, not all of which are
known to the company, described most recently in the "Risk Factors"
section in the Company's most recently filed annual report on Form
10-K. Neither the Company nor any other person assumes
responsibility for the accuracy or completeness of these
statements. The Company will update the information in this press
release only to the extent required under applicable securities
laws. If a change occurs, the company's business, financial
condition, liquidity and results of operations may vary materially
from those expressed in the aforementioned forward-looking
statements.
COIN-G
CONTACT: PR Financial Marketing
Investor Contact:
Jim Blackman
713-256-0369
jim@prfmonline.com
Converted Organics Inc.
Public Relations Contact:
(617)624-0111
info@convertedorganics.com
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