No. of Recommendations: 1
Looks like the rumors and speculation were true. Daystar has restructured their financing and is selling 2.5 million shares at $2/share. If I understand the release correctly, it looks like they may also be able to make future note payments with stock (at $2 share). The good news is that they're not going bankrupt right away. The bad news is that they're going to significantly dilute their share value. The stock was already up 20% today before the announcement, it traded flat for a few minutes after the announcement and then retreated to about 10% or so off of the high. I'm not sure how this is going to shake out but it looks like my bet at $2.50 might be ok...

DayStar Restructures Senior Note and Obtains Commitments for Additional Capital
Friday January 19, 3:02 pm ET

HALFMOON, N.Y., Jan. 19 /PRNewswire-FirstCall/ -- DayStar Technologies, Inc. (Nasdaq: DSTI - News), a developer and manufacturer of innovative CIGS Photovoltaic Foil(TM) products, today announced that it has successfully restructured its $15 million senior convertible note originally issued in May of 2006.

DayStar has entered into an agreement with a new investor under which the original investor will transfer the debt, a Class B warrant and the associated rights of each to the new investor, who has agreed to certain modifications to these obligations. Under the terms of this agreement, the Company will make a payment to the original investor prior to the transfer in the form of cash and shares of the Company's common stock, which issuance will constitute payment in full for all currently due amounts of principal and interest. Additionally, the original investor will receive an additional Class A Warrant to purchase 317,394 shares of common stock when permitted by Nasdaq's rules.

The new holder of the debt and the Company have agreed that principal and interest payments on the debt will resume with the first principal payment due on February 19, 2007. In addition, they have agreed to amend the terms of the debt to provide that, when permitted by Nasdaq's rules and subject to standard closing conditions, all principal and interest amounts due on the debt will convert into the Company's common stock at a price of $2.00 per share. Upon this conversion, the Class B Warrant and all the existing debt covenants will terminate.

As part of this purchase, the Company has also entered into a Stock Purchase Agreement with another group of new investors under which the Company has agreed to sell 2,500,000 shares of common stock at a price of $2.00 per share when permitted by Nasdaq's rules and subject to standard closing conditions.

DayStar has submitted a request to Nasdaq that the issuance of the new Series A Warrant, the conversion proposed for its debt and the new sale of stock all be permitted without the submission to a stockholder vote that would otherwise be required by Nasdaq's marketplace rules. In the event such exemptive relief is not obtained, DayStar intends to hold a meeting of its stockholders to approve these issuances as soon as practicable. http://biz.yahoo.com/prnews/070119/sff018.html?.v=78 .................
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