By Devika Patel
Knoxville, Tenn., Feb. 15 - Advance Nanotech, Inc. said in an 8-K filed Friday with the Securities and Exchange Commission that it does not have a sufficient number of authorized shares to cover a $6.7 million private placement of 8% senior secured convertible notes due December 2010 that priced in December, but completed the placement Friday after obtaining approval for a charter amendment.
The company said in the filing that it instead issued $3.95 million in notes with a principal face amount of $3,953,000 and warrants to buy 7,906,000 common shares. The remainder of the proceeds received in the private placement was placed in escrow until the company's certificate of incorporation could be amended to increase the number of authorized shares of common stock to 200 million from 75 million.
Upon obtaining approval of the charter amendment on Feb. 15, the company issued $2.75 million more in notes, bringing the total amount issued up to $6.7 million, and warrants for 5,494,000 common shares.
The notes mature in December 2010 and are convertible into common shares at $0.25 per share.
The warrants are exercisable at $0.30 for five years.
Axiom Capital Management was the agent and Middleberry Capital was a financial adviser.
Proceeds will be used to complete the transition of the company's business from developing early stage nanotechnologies to becoming a fully operating company principally focused on the growing chemical detection industry.
New York-based Advance Nanotech commercializes technologies used in the homeland security and display technology sectors.
| Issuer: | Advance Nanotech, Inc.
|
| Issue: | Senior secured convertible notes
|
| Amount: | $6.7 million
|
| Maturity: | December 2010
|
| Coupon: | 8%
|
| Price: | Par
|
| Yield: | 8%
|
| Conversion price: | $0.25
|
| Warrants: | For 13.4 million shares
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.30
|
| Agent: | Axiom Capital Management
|
| Pricing date: | Dec. 27
|
| Settlement dates: | Dec. 27 (for $3,953,000), Feb. 15 (for $2,747,000)
|
| Stock symbol: | OTCBB: AVNA
|
| Stock price: | $0.30 at close Dec. 26
|
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