Adding COIN under .42 for longer hold.
NO TA turn yet !!! scaling in
Rapidly growing organic fertilizer etc, but not profitable atm
Recently their bondholders converted their 17mln debt to preferred shares.
Oppenheimer funds, so those have big portion of the company now.
On October 18, 2010, Converted Organics Inc. (the "Company") entered into an Exchange Agreement (the "Exchange Agreement") with Oppenheimer Rochester National Municipals and Oppenheimer New Jersey Municipal Fund, each a series of Oppenheimer Multi-State Municipal Trust, a Massachusetts business trust (together, the "Bond Holder"). The Bond Holder was the sole holder of $17,500,000 aggregate principal amount Solid Waste Facilities Revenue Bonds (the "Bonds") that were issued on behalf of Converted Organics of Woodbridge, LLC, a wholly owned subsidiary of the Company ("Converted Woodbridge").
Pursuant to the Exchange Agreement, the Bond Holder agreed to exchange:
(i) the Bonds (which represented 100% of all Bonds), and (ii) class B warrants to purchase 2,284,409 shares the Company's common stock (the "Class B Warrants") for 17,500 shares of the Company's newly authorized 1% Series A Convertible Preferred Stock (the "Series A Preferred Stock"). In addition, the Bond Holder agreed to waive all interest accrued and unpaid from February 1, 2010 until the date of the Exchange Agreement on the Bonds, and agreed to transfer to the Company approximately $600,000 that the Company had previously deposited into certain reserve accounts in connection with the Bonds. The description of the Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the Exchange Agreement, which is filed as Exhibit 10.1 to this report and incorporated herein by reference.
Terms of the Series A Preferred
To designate and establish the shares of Series A Preferred, the Company's Board of Directors approved, and on October 18, 2010, the Company filed with the Delaware Secretary of State, a Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock (the "Certificate of Designation").
Conversion; Conversion Price
Each share of Series A Preferred is convertible into a number of shares of Common Stock equal to (1) the stated value of the share ($1,000), divided by (2) $0.543 (the "Conversion Price").
Dividends; Liquidation
Holders of the Series A Preferred are entitled to receive cumulative dividends at the rate per share (as a percentage of the stated value per share) of 1% per annum (subject to increase in certain circumstances), payable annually and on each conversion date. The dividends are payable, during the first three years after issuance, at the election of the Company, and thereafter, at the election of the holder, in cash or in shares of Company common stock valued at the Conversion Price (or in some combination thereof).
Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of the Series A Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the greater of: (i) $0.01 for each share of Company common stock underlying the Series A Preferred Stock then held by holders, or
(ii) the amount the holders would have received had the holders converted the Series A Preferred Stock then held into Company common stock immediately prior to the liquidation, dissolution or winding-up, in each case, before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series A Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
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