Ener-Core Inc. Signs Deal For Private Placement, New Capital Will Help Achieve Positive Cash Flow

Ener-Core Inc. Signs Deal For Private Placement, New Capital Will Help Achieve Positive Cash Flow

By: Dylan Sikes - AllPennyStocks.com News

Friday, November 25, 2016

The oil and gas sector has remained buoyant since the Trump election. The sector, depressed for over 2 years under the regulatory stranglehold of the Obama administration, which took a dislike to the sector after the BP oil spill, is now expecting loosening of regulations, and possibly opening up of federal lands for exploration. Industry insiders also expect Trump to not ban fracking, as was the want of the democratic administration. Many industry experts hope that the Trump win will be good for the energy sector overall. Ener-Core Inc. (OTCQB:ENCR) is an innovative company involved in gas conversion technologies for global commercial and industrial facilities. As the prospects for the oil and gas sector is seen to be going better, the company has taken steps to keep itself properly positioned for the spike. It recently announced that it has inked a definitive document for a private placement of up to approximately $4.5 million principal amount of convertible senior secured notes and warrants to purchase the Company's common stock. It is expected that the proceedings will be closed on approximately $3.6 million principal amount of convertible senior secured notes and warrants on November 29, 2016.


Under the terms of the agreement, Ener-Core may issue up to an additional $900,000 principal amount of convertible senior secured notes and warrants on or prior to December 12, 2016. The company is likely to use the proceeds for the purpose of meeting working capital needs and general corporate expenses.

The terms of the private placement also oblige the company to provide each investor certain registration rights with respect to the securities issuable upon any conversion of such investor's convertible senior secured notes and the shares underlying the warrants.

Alain Castro, CEO of Ener-Core, said, “The closing of the new financing and amendment of our existing debt considerably improves Ener-Core's financial position, as the amount of cash flow required to address our interest expenses has been substantially reduced."

The CEO further explained that this new tranche of the capital will help the company in achieving positive cash flow operations in the next 15 months. The company is also pivoting towards a license fee based business model to achieve this target.

Ener-Core currently has two power stations in operation at a landfill site in the Netherlands and at the University of California, Irvine. 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. In a sector that is seeing some hope after 2 long years of depression, ENCR is well-positioned to take advantage of the new movement in the broad sector, in which it competes with companies like Questor and PFMG.

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