Ener-Core, Inc. announced that it has received $0.23 million in funding from Empery Asset Management, LP
January 24, 2019
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Ener-Core, Inc. (OTCPK:ENCR) announced that it has entered into a securities purchase agreement with four accredited investors for a private placement of unregistered convertible senior secured promissory notes and five-year warrants for gross proceeds of $230,000 on January 25, 2019. The transaction included lead investor, Empery Asset Master, Ltd., a fund managed by Empery Asset Management, LP. The notes have a principal value of approximately $966,667. The warrants will allow the investor to purchase an aggregate of 1,933,334 shares of the company’s common stock, par value $0.0001 per share, at an exercise price of $0.10 per share. The notes are issued at a discount of 10%. The convertible senior notes will be convertible at the option of the holder into common stock at an exercise price of $0.10 and will automatically convert into shares of common stock on the fifth trading day immediately following the issuance date of the convertible senior notes on which the weighted average price of the common stock for each trading day during a twenty trading day period equals or exceeds $5.00 and no equity conditions failure has occurred. The notes will bear no interest and will mature on December 31, 2020. The notes will bear interest at a rate of 10% per annum in the event of default. The convertible senior notes also contain a blocker provision that prevents the company from effecting a conversion in the event that the holder, together with certain affiliated parties, would beneficially own in excess of either 4.99% or 9.99%, with such threshold to be determined by the holder prior to issuance, of the shares of common stock outstanding immediately after giving effect to such conversion. At any time after the issuance date of the Convertible Senior Notes, the Company may redeem all or any portion of the then outstanding principal and accrued and unpaid interest with respect to such principal, at 100% of such aggregate amount.
The company will issue associated warrants to purchase 2,000 shares of common stock for each $1,000 of principal amount of convertible senior notes. Securities issued in the transaction will be in reliance on the exemption from registration under the Securities Act provided by Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder. The notes to be issued are guaranteed by Ener-Core Power, Inc., the subsidiary of the company.
Ener-Core, Inc. designs, develops, manufactures and has commercially deployed products based on technologies that generate base-load, clean power from polluting waste gases that are otherwise destroyed or vented into the atmosphere by a range of industries. The Company also designs its technologies to provide power generation solutions with reduced air emissions. Its Power Oxidation technology offers an alternative to traditional methods of destroying gaseous pollution, by simultaneously enabling industrial facilities. Its commercial products include Ener-Core Powerstation EC250 (EC250) and Ener-Core Powerstation EC333 (EC333), which combine its Power Oxidizer with an approximately 250 kilowatt (kW)and over 333 kW gas turbine, respectively. It is also engaged in developing a product, which is called the KG2-3GEF/PO (KG2 with Power Oxidizer (KG2/PO)). It has over two powerstations in operation at a landfill site in the Netherlands and at the University of California, Irvine.