TexCom gets OK to convert series A convertible preferreds into shares

By Susanna Moon

Chicago, Sept. 30 – Texcom, Inc. said holders of more than 80% of its 10% series A convertible preferred stock approved the conversion offer announced on Aug. 30.

The company will pay accrued dividends through Sept. 30 totaling $3,246,000 to the holders of the preferreds, and each share of preferred outstanding will be automatically converted into two-tenths of a share of common stock, effective Sept. 30, according to a company press release.

The 2,028,750 preferreds will be converted into an aggregate of 405,750 common shares.

As previously announced, the company offered to issue common stock in exchange for the convertible preferreds, which were issued in an October 2006 private placement with Financial West Group as the placement agent.

At the time, the company sold 2,125,000 preferreds at $2.00 apiece for proceeds of $4.25 million.

When the placement was announced, each preferred was convertible into two common shares at $1.00 each.

The current conversion rate, as adjusted for the recent one-for-10 reverse stock split of the company’s common stock, provides that each preferred is convertible into two-10ths of a common share, as previously noted.

The offer was contingent on the company obtaining the approval of the holders of at least a two-thirds majority of the preferreds. TexCom sought approval by the end of September.

Because the approval was received, all of the preferreds will be automatically converted into common stock and the company will pay all accrued dividends through Sept. 30.

As of Sept. 30, accrued dividends is $1.60 per preferred, or a total of $3,246,000 for all outstanding preferred shares.

“With the conversion of the preferred stock to common stock, we now have a clean balance sheet and have resolved all of the company’s legacy challenges,” president Bob May said in a company press release.

“We can now focus all of our attention on strategic acquisitions and improving operating performance.”

TexCom’s common stock last traded on Aug. 14. Adjusted for the reverse stock split, the price was $2.29 (OTC Pink: TEXC).

The Houston-based company develops biodiesel production facilities.

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