Investors also receive three-year warrants exercisable at $1.75
By Angela McDaniels
Tacoma, Wash., Jan. 11 - OriginOil, Inc. plans to issue up to $1.95 million of 8% convertible subordinated notes with warrants. The offering began in December. As of Tuesday, the company has sold $228,250 of convertibles and warrants to acquire 260,862 shares of common stock.
The notes mature 12 months after issuance, according to an 8-K filing with the Securities and Exchange Commission.
The notes are convertible under certain conditions into shares of OriginOil common stock at a conversion price of $1.75 per share.
The three-year warrants are exercisable at $1.75 per share.
The conversion and warrant strike prices are 2.9% higher than the company's closing share price on Wednesday, $1.70.
At maturity, the notes will be redeemed at 112% of par.
If the company's original issue discount notes issued in July 2011 continue to be outstanding on July 13, 2012, then the company is obligated to issue to the holders of the 8% convertibles an additional number of shares equal to the number issuable upon conversion without reducing the outstanding principal due on the notes.
The company issued $32,500 of subordinated convertible notes in the fourth quarter in an offering that has since terminated. Of this amount, $20,000 was exchanged for the 8% convertibles and warrants in the December offering, and OriginOil also issued 109,168 shares in exchange for services and the waiver of some rights.
As a result of the recent sales of convertibles and warrants, the conversion price of the original issue discount convertible debentures and the exercise price of the warrants issued in a private placement on July 11 have been automatically adjusted to $1.75.
The Los Angeles company has developed a technology to produce a bio-fuel from algae.
| Issuer: | OriginOil, Inc.
|
| Issue: | Convertible subordinated notes
|
| Amount: | Up to $1.95 million
|
| Maturity: | 12 months
|
| Coupon: | 8%
|
| Payout at maturity: | 112% of par
|
| Conversion price: | $1.75
|
| Warrants: | Yes
|
| Warrant expiration: | Three years
|
| Warrant strike price: | $1.75
|
| Announcement date: | Jan. 11
|
| Stock symbol: | OTCBB: OOIL
|
| Stock price: | $1.70 at close Jan. 11
|
| Market capitalization: | $12.91 million
|
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