Axion International Holdings Inc., a company that has made its reputation making plastic bridges for the U.S. military, now has investment from Lincoln Park Capital, a Chicago-based equity investment firm.
Officials with New Providence, N.J.-based Axion said Lincoln Park purchased 100,000 shares of common stock at $2.05 per share, and warrants to acquire 50,000 shares at $2.91 per share.
Axion is traded on the over-the-counter securities market under trade symbol AXIH. Its per-share price was at $1.40 in late trading May 27.
Lincoln Park is a part of our overall equity raise, Axion CEO Jim Kerstein said in a May 18 telephone interview. We're excited to deal with them.
The equity likely will be used to build molds. Axion does not produce its recycled-plastic high-load industrial products in-house but rather relies on contract molding in several states.
Our overall strategy is that we're out in the marketplace raising more equity funds, Kerstein said. The other is straight equity infusions and investments. We really do feel we're at the tipping point in the development of the company with the work we're doing with railroads, military and general industrial projects.
Lincoln Park officials did not return a call seeking comment.
The same week in which Lincoln Park made its investment, Axion rejected a financing bid by Harborview Master Fund LP, a New York-based investment group.
Although the company generally does not comment on proposed transactions or speculations, we believe it is necessary to address Harborview's proposal due to its public disclosure of what it styled as a 'proprietary and confidential' term sheet, said Kerstein. After careful review, our board determined that the proposed financing was not in the best interest of the company and its shareholders because the terms requested by Harborview undervalued the company and were extremely onerous.
In Harborview's filing with the Securities and Exchange Commission, Harborview officials said that Lincoln Park Capital really only paid $205,000 for 185,000 shares of common stock at a purchase price of $1.10 per share, well below the company's May 6 closing price of $1.56, along with receiving free warrants.
Harborview made this claim because it says Axion issued Lincoln Park Capital 85,000 shares of common stock in February for no consideration at all other than to enter into a purchase agreement.
A Harborview official did not return a call seeking comment.
We didn't think it was good financing for us, Kerstein said. We have other groups that are beginning to invest in us. When you're a public company people can say things and make things public. This one, we just have a difference of opinion.
Working on railroad
Meantime, Axion also has had successful testing of two 100 percent railroad bridges in Fort Eustis, Va. The bridges used Axion's recycled structural composite system, which uses post-consumer and post-industrial plastic. The short-span bridges are roughly 40 feet by 80 feet. The bridges were designed to deliver a high-load rating of 130 tons, and are being used for locomotives and freight.
This is a quantum leap forward for the technology, Kerstein said. The tests and projections came out just dead on with the numbers. It was an extremely exciting project for us to be involved in.
On May 14, Axion also announced it has named Miles Slater as its interim president. Slater is the former president and CEO of Salomon Bros. International. Slater replaces Marc Green, co-founder of Axion, who will focus on business development.
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