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Thursday, October 27, 2016

Ener-Core to Repurchase Convertible Notes

August 18, 2014

ENER-CORE, Inc., whose proprietary Gradual Oxidation technology and equipment generates clean electric power from low quality and waste gases, announced it has entered into agreements with the investors in its April 2014 convertible notes to repurchase the notes in full.

Ener-Core will repurchase the $4.6 million principal amount of notes for $1.86 million in cash and $2.7 million in Ener-core shares valued at $0.20 per share for a total of 13,554,854 shares and will recover approximately $405,000 in cash proceeds released from restricted cash balance previously subject to a control account. Management anticipates the repurchase of the convertible notes to be completed by August 15, 2014, following which all the notes will be cancelled and the company will have no outstanding debt.

Alain Castro, CEO of Ener-Core, stated, "Our prospective customers have continued to show support for the company and signaled the closing of commercial orders; however, the debt structure has been an obstacle. While removing this high-cost debt structure through the issuance of shares and the related dilution to shareholders are difficult, we improved our balance sheet, which we believe is a prudent and essential decision to facilitate progress on our future growth initiatives and support the financial stability of Ener-Core. With Ener-Core appropriately capitalized, we believe that our discussions with prospective customers can continue and further our goal of commercial deployment of our technology.

"We believe that the repurchase of the convertible notes leaves Ener-Core in a much stronger financial position, and will bolster our ability to focus on getting commercial deals completed and serving our customers."

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