By Laura Lutz
Des Moines, Dec. 13 - Electro Energy Inc. raised $8.1 million from the private placement of a senior secured convertible debenture, according to an 8-K filing with the Securities and Exchange Commission.
Quercus Trust bought the debenture, which has a principal amount of $18 million.
In connection with the deal, Quercus also bought $9.9 million principal amount of existing senior secured convertible notes from other noteholders for $7,425,001 in cash.
The existing notes were redeemed by the issuance of the new debenture.
For their participation in the deal, Electro issued to the previous noteholders a total of $488,320 in cash, 5,401 shares of series B convertible preferred stock and warrants for 5.4 million shares. The preferreds are convertible at the greater of 70% of the market price of the stock and $0.25.
Electro also lowered the exercise price of warrants held by the previous noteholders to $0.55 per share.
The new debenture bears interest at 10% per year. Beginning on the earlier of the effectiveness of a registration statement and one year after issuance, it is convertible into common stock at $0.55 per share.Quercus also received a warrant for 32,272,273 shares from Electro.
All of the new warrants are exercisable at $0.55 per share for three years.
Proceeds will be used for working capital and general corporate purposes.
Based in Danbury, Conn., Electro Energy develops hybrid battery technologies.
| Issuer: | Electro Energy Inc.
|
| Issue: | Senior secured convertible debenture
|
| Proceeds: | $8.1 million plus surrender of $9.9 million of existing convertibles
|
| Principal amount: | $18 million
|
| Coupon: | 10%
|
| Price: | Par
|
| Yield: | 10%
|
| Conversion price: | $0.55
|
| Warrants: | For 32,272,273 shares
|
| Warrant expiration: | Three years
|
| Warrant strike price: | $0.55
|
| Investor: | Quercus Trust
|
| Pricing date: | Dec. 7
|
| Settlement date: | Dec. 7
|
| Stock symbol: | Nasdaq: EEEI
|
| Stock price: | $0.95 at close Dec. 7
|
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