BOSTON, Dec. 20, 2010 (GLOBE NEWSWIRE) -- Converted Organics Inc. (Nasdaq:COIN) announced today that it has closed on a financing transaction with select institutional investors wherein it has agreed to sell convertible notes and warrants, the sale of which provides the Company with an immediate $3.75 million in cash before expenses, and potentially an additional $1.0 million upon meeting certain conditions of the transaction, including holding a Special Meeting of Stockholders by February 28, 2011.
Under the terms of the transaction, the Company agreed to sell to the investors convertible notes in the aggregate original principal amount of $4,990,000, such notes to be purchased in two tranches. The first tranche, which the Company completed on December 17, 2010, involved the sale of notes in the aggregate original principal amount of $3,939,473.68 for a purchase price of $3,750,000 ("Initial Notes") ("Initial Closing"), and the second tranche will involve the sale of notes in the aggregate original principal amount of $1,050,526.32 for a purchase price of $1,000,000 and shall be consummated upon the satisfaction of the certain closing conditions ("Additional Notes") ("Additional Closing"), including the receipt of shareholder approval as discussed below. The Company is required to repay the Initial Notes in six equal monthly installments either in cash or in shares of common stock commencing February 1, 2011. The notes are convertible into shares of common stock at a conversion price of $1.00 per share.
For complete details on the transaction, including the details of the note and the warrants please see the form 8-K filed December 17, 2010.
Converted Organics has agreed to hold a shareholder meeting by February 28, 2011 to approve: (A) the issuance of greater than 19.99% of the Company's shares of common stock pursuant to the notes and Series B Warrants, (B) the adjustment of the exercise price of the Series A and Series C Warrant below their floor prices, and (C) issuance of the Additional Notes and associated warrants; and (D) the elimination of the temporary floor price in the Class G warrants held by one of the investors in the offering.
"We are pleased that institutional investors have decided to support our efforts to restructure the Company allowing us to put the Company in a position to thrive and grow in an exciting intersection of three dynamic interrelated environmentally-responsible business opportunities: Agriculture, Waste, and Water," said Edward J. Gildea, President and CEO of Converted Organics. Gildea continues, "The Company controls cutting edge vertical farming growth technologies, sustainable organic fertilizers, and technology to clean contaminated water and this financing will help us deliver on the promise these businesses offer."
The notes and warrants were issued pursuant to a currently effective shelf registration statement on Form S-3. Chardan Capital Markets, LLC, as placement agent, acted on a best efforts basis for the offering.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
About Converted Organics Inc.
Converted Organics (Nasdaq:COIN) (), based in Boston, MA, is dedicated to producing high-quality, all-natural, organic soil amendment and fertilizer products through food waste recycling. The Company uses its proprietary High Temperature Liquid Composting (HTLC) system, a proven, state-of-the-art microbial digestion technology, to process various biodegradable food wastes into dry pellet and liquid concentrate organic fertilizers that help grow healthier food and improve environmental quality. Converted Organics sells and distributes its environmentally-friendly fertilizer products in the retail, professional turf management, and agribusiness markets.
The Converted Organics Inc. logo is available at
This press release contains forward-looking statements that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. In some cases, you may identify forward-looking statements by words such as "may," "should," "plan," "intend," "potential," "continue," "believe," "expect," "predict," "anticipate" and "estimate," the negative of these words or other comparable words. These statements are only predictions. One should not place undue reliance on these forward-looking statements. The forward-looking statements are qualified by their terms and/or important factors, many of which are outside the Company's control, involve a number of risks, uncertainties and other factors that could cause actual results and events to differ materially from the statements made. The forward-looking statements are based on the Company's beliefs, assumptions and expectations of our future performance, taking into account information currently available to the Company. These beliefs, assumptions and expectations can change as a result of many possible events or factors, including those events and factors, not all of which are known to the company, described most recently in the "Risk Factors" section in the Company's most recently filed annual report on Form 10-K. Neither the Company nor any other person assumes responsibility for the accuracy or completeness of these statements. The Company will update the information in this press release only to the extent required under applicable securities laws. If a change occurs, the company's business, financial condition, liquidity and results of operations may vary materially from those expressed in the aforementioned forward-looking statements.
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CONTACT: PR Financial Marketing Investor Contact: Jim Blackman 713-256-0369 jim@prfmonline.com Converted Organics Inc. Public Relations Contact: (617)624-0111 info@convertedorganics.com