WORCESTER, Mass., June 27, 2011 /PRNewswire/ -- ThermoEnergy Corporation (OTCBB: TMEN), a diversified technologies company engaged in the municipal and industrial wastewater treatment and power generation technologies, today announced that investors holding warrants to purchase stock in the Company had made an aggregate of $2.9 million in bridge loans to the Company in anticipation of the ultimate exercise of such warrants and are expected to invest an additional $1.6 million for a total of $4.5 million. The Company intends to use $1.6 million of this investment to pay down debt, which will automatically trigger the conversion of $4.4 million of remaining debt into shares of the Company's Series B Preferred Stock and common stock warrants. As a result of the transaction, $6.0 million of the Company's debt will be extinguished. Combined with the additional cash from the transaction remaining after cancellation of the debt, this will represent an increase of approximately $8.9 million in our shareholders' equity.
Mr. Cary Bullock, President and Chief Executive Officer of ThermoEnergy said, "We are excited to have completed this round of financing providing necessary working capital and the ability to pay off and convert most of our debt to equity. Because this transaction involves using shares that are already a part of our capital structure, this deal will be only slightly dilutive to our existing shareholders while allowing us to eliminate most of our debt. In broad strokes, we will have increased our capitalization about 8% in exchange for an equity investment, based on new funding and debt conversion, of $8.9 million."
Mr. Bullock added, "There are several benefits to the Company and our shareholders. We have working capital to continue to build a great company. We will have eliminated approximately $6 million of debt. Finally, once the transaction is completed, along with the other measures taken over the past year, we have greatly deleveraged the Company, since this debt would have become due early in 2012. We are optimistic that our shareholders now own a company with a healthy future, a growing sales pipeline, and great technologies for the global clean tech market."
For additional details, please see our 8K filed with the SEC today.
Founded in 1988, ThermoEnergy is a diversified technologies company engaged in the worldwide development, sales and commercialization of patented and/or proprietary municipal and industrial wastewater treatment and power generation technologies. Additional information on the Company and its technologies can be found on its website at www.thermoenergy.com.
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