Lithium Technology accelerates maturity of $3 million convertibles

By Sheri Kasprzak

New York, Feb. 3 - Lithium Technology Corp. said it the maturity of its $3 million in convertible debentures originally due Oct. 7, 2006 has been accelerated.

The 8% debentures, held by Cornell Capital Partners, will now be due, including interest, on March 15.

The company also amended the debentures so that half of any proceeds obtained through an equity or debt financing must be used to pay principal and interest on the debentures.

If the principal and interest on the debentures is not repaid in full by March 15, the company may pay $900,000 in principal on the debentures and repay the balance in seven equal payments beginning April 1.

For the amendment, the strike price of 20 million warrants issued in the deal will be reduced to $0.0128 each on a pro-rata basis. Originally, 10 million of the warrants had been exercisable at $0.06 each, 5 million at $0.07 each and 5 million at $0.10 each.

The debenture, under the amendment, will not be convertible through March 15 assuming the company maintains its payment obligations.

Also, the company has extended the maturity on a $2.5 million unsecured convertible debenture, originally due June 15, 2006.

That 12% debenture will now be due on Dec. 31, 2006. In addition, the interest rate has been increased to 15%.

As of Jan. 31, the company had $2 million in principal plus interest outstanding on the debenture.

Based in Plymouth Meeting, Pa., Lithium Technology makes rechargeable lithium ion batteries for notebook computers and cell phones.

On Friday, the company's stock lost $0.002 to close at $0.025 (OTCBB: LTHU).

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