BioNitrogen Holdings Corp. (BIONQ)

[traderwebb]

Adam's response to

Anyone know the status of the Convertible Debentures that show not converted Period End: Dec 31, 2012 filing (Annual Report). There is a bunch of them (toxic financing) To be Registered on S-1 Filing

These were new issuances in 2012 and the company received cash for the issuance. The cash is being used to advance the engineering and cover working capital needs. The terms were described in a press release and 8-K filing. They are being converted into equity. The debenture comes due in June 2013, and people are converting at their option into equity.



I would not classify these are toxic. Toxic is typically associated with situations where the company receives little or no cash in exchange for convertible debt that has a conversion price that resets. In these situations, the convertible can and often does get reset at a lower stock price, hence the terms toxic or death spiral.



In BioNitrogen's case, the company issued convertible debentures to receive cash to fund operations. The debentures were issued at the then trading market price per share.