By Devika Patel
Knoxville, Tenn., Aug. 29 - Ecology Coatings, Inc. said it arranged $5 million in a private placement of 5% cumulative convertible preferred stock with Equity 11, Ltd. on Aug. 27. The company settled an initial tranche for $1.26 million on Aug. 28.
The preferreds were sold at $1,000 apiece, the company said in an 8-K filed Friday with the Securities and Exchange Commission. Equity bought 1,260 preferreds in this tranche and may buy 3,740 additional preferreds over the next few months.
The preferreds are convertible into common stock at $0.50 per share. On and after Aug. 25, 2009, the preferred stock will be subject to mandatory conversion into common stock if the volume-weighted average price of the company's common stock exceeds $3.00 per share for a continuous 30-day period.
The company may redeem the preferreds on or after Aug. 25, 2013. There is a put option after Aug. 25, 2015.
Equity also received warrants for 2.5 million common shares which are exercisable at $0.50.
Based in Salt Lake City, Ecology Coatings develops nanotechnology-enabled, ultra-violet curable coatings that are designed to drive efficiencies and clean processes in manufacturing.
| Issuer: | Ecology Coatings, Inc.
|
| Issue: | Cumulative convertible preferred stock
|
| Amount: | $5 million
|
| Shares: | 5,000
|
| Price: | $1,000
|
| Dividends: | 5%
|
| Conversion price: | $0.50
|
| Call: | After Aug. 25, 2013
|
| Put: | After Aug. 25, 2015
|
| Warrants: | For 2.5 million shares
|
| Warrant strike price: | $0.50
|
| Investor: | Equity 11, Ltd.
|
| Pricing date: | Aug. 27
|
| Settlement date: | Aug. 28 (for $1.26 million)
|
| Stock symbol: | OTCBB: ECOC
|
| Stock price: | $1.13 at close on Aug. 27
|
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