GM,S-3a filed today an excerpt.
OUTSTANDING SENIOR DEBT. The Company's only senior debt outstanding as of November , 1997 consists of $10 million worth of one-year 14% convertible notes (the "Notes"), which were issued for net proceeds of approximately $9,579,000.The Company may prepay all, but not less than all of, the Notes six months after closing (the "Call Date") at the greater of (x) 100% of the principal amount of the Notes and (y) the number of shares into which the Notes are convertible on the Call Date plus accrued interest, minus one-third of the difference between
(x) and (y). Although the Holders of the Notes may convert the outstanding principal of the Notes at any time after November 27, 1997 into the Company's Common Stock at $6.25 per share (approximately 112% of the average closing bid price for the five trading days preceding the closing), no conversions may take place before February 12, 1998 (120 days after close) unless the market price of the Company's Common Stock exceeds approximately $8.33 per share (145% of the Closing Price). After six months, the Notes may be converted at the lesser of (i) $6.25 per share, (ii) 85% of the Market price at conversion and (iii) the daily weighted-average sales price reported for the lowest five consecutive trading days during any 40-day period following the Call Date. The proceeds are being used for start-up capital for the refinery and for other Company projects and general correspondence. The Company anticipates that the Notes will be converted into common stock or repaid in full by the due date. If the Company is unable to repay the Notes on a timely basis, it believes it will be able to successfully renegotiate new payment terms with the holders of the Notes.
However, failure to do so could impede or jeopardize the Company's ability to continue its operations. The previously outstanding notes to MGTF totaling $2,108,000 were paid in full on October 1, 1997. The Company utilized a portion of the proceeds from other borrowings to repay this debt.
DrRisk |
