nCoat gets default waiver for 6% convertibles; lowers conversion price

By Laura Lutz

Des Moines, Dec. 6 - nCoat, Inc. received a waiver of defaults from some holders of at least 75% of its 6% series A convertible notes and 6% series B convertible notes, according to an 8-K filing with the Securities and Exchange Commission.

The conversion price of both series of notes was lowered to $0.25 from $0.40 by the agreements.

Following the waiver, nCoat will not be liable for liquidated damages under the series A notes if it is not able to register all of the securities that it was originally required to register if those securities are transferable by holders under Rule 144 by Feb. 29, 2008. nCoat will also owe only partial liquidated damages under the series A notes for events of default occurring after the earlier of Feb. 29, 2008 and the effective date of the registration statement.

The agreements also added benchmarks for net cash used in operating activities for each series of notes.

The holders of the series A convertibles are Enable Growth Partners LP; Enable Opportunity Partners LP; Pierce Diversified Strategy Master Fund LLC, Ena; Capital Ventures International; Edward A Bugniazet; and Scott Lyman.

The holders of the series B convertibles are Avendale Equity, LLC; Knight Capital Group; and GGR II, LLC.

Located in Whitsett, N.C., nCoat develops nano-formulated and traditional coatings applied to metals, ceramics, fabrics and other materials.

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