Convertible notes, warrants, and secured notes
Today, AXION filed reports with the SEC that it received $1,200,000.00 in cash.
It is contemplated that the secured note will be exchanged for more convertible notes and warrants on or before November 29, 2013. The date is the last Friday of November and it is the week following the 3rd quarter 10-Q.
Interesting to see that this report shows who the largest holders of AXION are:
(1) ALLEN KRONSTADT
(2) MLTM Lending LLC
(3) SAMUEL G ROSE
My pet theory is that these investors in AXION are simply taking advantage of an agreement that they created on August 27, 2012. There is an 8-K on August 27, 2012 that explains the initiation of the arrangement that the investors are modifying and purchasing convertible notes under as of October 21, 2013. This allows the investors to receive convertible notes and warrants at 0.40 and 0.60 per share each
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Excerpts from the filings
WHEREAS, (i) on the date hereof, the Secured Party has loaned Debtor an aggregate of approximately $603,000 (other than the loans made on the date hereof in consideration for Convertible Notes), and in consideration of such loans, Debtor proposes to issue to each such Secured Party a secured promissory note, and (ii) it is contemplated that following the date hereof, the Secured Party shall loan Debtor an aggregate of up to an additional $3,000,000, and in consideration of such loans, Debtor proposes to issue to each such Secured Party a secured promissory note (the secured promissory notes referred to in (i) and (ii) are hereinafter collectively referred to as the “Secured Notes”), and each such Secured Note shall be exchanged on a future date for a Convertible Note and warrants to purchase shares of Debtor’s common stock;
On October 21, 2013, MLTM loaned the Issuer $201,002.40 and, in consideration of such loan, the Issuer issued MLTM one of its secured promissory notes. Under the terms of such secured promissory note, it is contemplated that such secured promissory note will be exchanged no later than November 29, 2013 for a Note in the principal amount equal to the principal amount of such secured promissory note plus all accrued and unpaid interest under such secured promissory note. In connection with the issuance of such Note, pursuant to the secured promissory note, the Issuer shall issue MLTM an associated warrant to purchase the number of shares of Common Stock into which such Note is initially convertible on the date of issuance. To secure the obligations under the secured promissory note issued to MLTM and the related secured promissory notes issued (and to be issued) by the Issuer, the Issuer, Axion International, Inc., a Delaware corporation and wholly-owned subsidiary of the Issuer (“Axion International”), and the Investors entered into the First Amendment to Security Agreement dated October 21, 2013.
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I would like to see $ 3,700,000.00 in revenue for the quarter and a re-iteration to reach $ 10 million in revenue for the full year 2013.
Only time will tell.
-D&C
