Plastinum fails to buy back convertible preferreds as required; going-concern status in doubt

By Angela McDaniels

Tacoma, Wash., Nov. 3 - Plastinum Polymer Technologies Corp. is in default under its debt and will cease operations unless it obtains additional funding, according to an 8-K filing with the Securities and Exchange Commission.

The holders of $4.06 million of its series B-1 convertible preferred stock have demanded that their convertibles be redeemed. The company is obligated to redeem the convertibles but cannot do so due to a lack of cash on hand.

The company was obligated to redeem $3.86 million of the convertibles on Nov. 1 and is obligated to redeem another $200,000 by Dec. 16.

In addition, the company has not yet made the Oct. 15 interest payment due on the series B-1 convertibles.

Plastinum said that as of Nov. 2, it has not made some required interest payments on $8,522,000 of convertible debt it has outstanding and $300,000 of the principal of that convertible debt, and the convertible debt is therefore in default.

To the company's knowledge, no holders have taken any actions against the company, but they could at any time seek to obtain a judgment against the company to enforce their rights.

Plastinum said it does not have enough cash on hand to make the payments described above nor to continue the business operations of its Dutch subsidiary and may have to cease operations.

In addition, unless funding is obtained, the company will not have enough funds to pay its auditors and legal counsel and, accordingly, will not be able to file further reports with the SEC.

The convertibles were issued in a private placement in November 2007.

Plastinum is a Los Angeles-based company focused on commercializing its proprietary plastic-blending technology.

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