Abakan settles lawsuit with Sonoro

Abakan Inc., advanced coatings and metal formulations market player, announced last Friday that it has entered into a Settlement Agreement with Sonoro Invest S.A. in connection with a dispute regarding promissory notes for an aggregate principal amount of US$2 105 000, which caused Sonoro to file a lawsuit against Abakan on 1 October, 2014, in the United States District Court for the Southern District of Florida.

“We are glad to resolve this issue as it allows us to pursue our aggressive growth plan to deliver substantial value to our shareholders. We are in the advanced stages of discussion with prospective financial and strategic partners that have shown a keen interest in providing both debt and equity financing to Abakan, but had expressed reservations on moving forward until this lawsuit was settled. Now, we expect to re-engage with these prospective partners to secure the capital required to pursue our growth plan. We intend to raise between US$4 – 5 million to pay existing short term debt, finance the construction of a new powder production facility to increase powder production to 160 tpy and work towards completing the development and qualification of our CermaClad clad pipe,” said Abakan CEO, Robert Miller.

The settlement with Sonoro provides that all existing promissory notes between the parties be cancelled and replaced with a new senior convertible promissory note in the amount of US$2 915 000 with interest at 5% payable in full on 29 February, 2016. Should Abakan prepay the new note, on or before 31 July, 2015, the amount required to satisfy the note will decrease to US$2 700 000, plus interest, without any penalty. While the note is outstanding it is convertible, at the sole option of Sonoro, into units of Abakan at US$1.00 per unit, each unit consists of one share and ½ of a warrant, each full warrant entitles the holder to purchase an additional share of Abakan for US$1.50. The Note ranks senior to any other indebtedness, except with respect to existing secured creditors including George Town Associates S.A. Nevertheless, the Sonoro settlement allows Abakan to enter into additional secured indebtedness on substantially the same terms as it has with George Town, for the purpose of satisfying amounts due to George Town, if such indebtedness is secured from certain lenders or from within a certain classification of lenders.

Edited from source by Elizabeth Corner

Read the article online at: https://www.worldpipelines.com/business-news/26052015/abakan-settles-lawsuit-with-sonoro/