XML 21 R19.htm IDEA: XBRL DOCUMENT v2.3.0.15
Subsequent Events
9 Months Ended
Sep. 30, 2011
Subsequent Events [Abstract] 
SUBSEQUENT EVENTS
NOTE 13 — SUBSEQUENT EVENTS
On October 19, 2011, the Company entered into an agreement, with its lender, pursuant to which the convertible note issued on April 1, 2011, as previously amended on August 9, 2011, in the aggregate original principal amount of $3,850,000 was amended. Pursuant to the original terms of the Note, the conversion price (“Conversion Price”) of the Note was $4.00, subject to adjustment as set forth in the Note. Pursuant to the Agreement, the parties agreed to change the definition of Conversion Price to mean, as of any conversion date or other date of determination, the lowest of (i) $4.00 (subject to adjustment as provided in the Note), (ii) the price which is equal to the product of (1) 85% multiplied by (2) the quotient of (A) the sum of each of the three (3) lowest closing sale prices of the common stock during the twenty consecutive trading day period immediately preceding the applicable conversion date or other date of determination (as the case may be) divided by (B) three (3) and (iii) the price which is equal to the product of (I) 85% multiplied by (II) the closing sale price of the common stock on the trading day immediately preceding the applicable conversion date or other date of determination (as the case may be).
On November 2, 2011, The Company entered into an agreement, with its lender, to exchange the convertible note issued on April 1, 2011, and amended on August 9, 2011 and October 19, 2011, in the aggregate original principal amount of $3,850,000, which had $3,474,797 of principal outstanding on November 2, 2011, for a senior secured convertible note in the aggregate original principal amount of $3,474,797 (the “New Note”). The terms of the New Note are substantially identical to the terms of the Original Note (with amendments), provided that the Company is not required to amortize payment for the New Note and the principal and interest on the New Note is now due on May 2, 2012, instead of February 17, 2012. The lender may convert all or part of the new note prior to maturity.
On October 20, 2011 the Company began to issue shares of its common stock to convert, first the convertible note dated April 1, 2011 and then the “New Note” dated November 2, 2011. The Company has issued 8,945,643 for principal reduction on these notes.
On October 31, 2011, the Company announced that its Board of Directors agreed to separate converted Organics, Inc and TerraSphere Systems Inc and declared a special stock dividend of common stock of TerraSphere Systems Inc, to the converted Organics shareholders.
On November 7, 2011, the Company implimented a one for ten (1:10) reverse split of its common stock. The effect of the reverse stock split is retroactively reflected in the accompanying financial statements and footnotes.
On November 8, 2011, the Company announced the resignation of one of its outside directors.