Investor group agrees to backstop $8 million rights offering
By Angela McDaniels
Tacoma, Wash., May 10 - Environmental Solutions Worldwide, Inc. sold $1 million of additional subordinated convertible promissory notes to a group of investors, and that group agreed to backstop the company's rights offering, according to an 8-K filing with the Securities and Exchange Commission.
The investor group includes Orchard Investments, LLC, John Hannan, Richard Ressler, Black Family 1997 Trust and members of the Black family. The group purchased $3 million of the notes in February.
The notes carry a 10% coupon that is payable monthly in kind.
The maturity date of the notes is the earlier of June 17, 2011 and the consummation of the rights offering.
The price per share in the rights offering is $0.12. As part of the rights offering, the investors will be able to convert their notes into common stock at the same price.
The conversion price is a 40% discount to the company's $0.20 closing share price on Feb. 21.
The target size of the rights offering is $8 million.
The group has committed to buy any shares not subscribed for in the offering, subject to a cap of 29,166,667 shares, or $3.5 million. If there are additional shares not subscribed for, the group can purchase them at its option.
The proceeds of the notes will be used for working capital.
Based in Concord, Ont., Environmental Solutions develops pollution-control products for the automotive and industrial markets.
| Issuer: | Environmental Solutions Worldwide Inc.
|
| Issue: | Subordinated convertible promissory notes
|
| Amount: | $4 million
|
| Maturity: | Earlier of June 17, 2011 and consummation of rights offering
|
| Coupon: | 10%, payable monthly in kind
|
| Conversion price: | $0.12
|
| Warrants: | No
|
| Pricing dates: | Feb. 17 for $3 million; April 27 for $1 million
|
| Settlement dates: | Feb. 22 for $3 million; May 3 for $1 million
|
| Stock symbol: | OTCBB: ESWW
|
| Stock price: | $0.20 at close Feb. 21
|
| Market capitalization: | $24.72 million
|
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