BOSTON, Oct. 31, 2011 (GLOBE NEWSWIRE) -- Converted Organics Inc. (OTCBB:COIN) announced today that its Board of Directors has unanimously agreed to separate Converted Organics and TerraSphere Systems, and by declaring a special stock dividend to its shareholders in which shareholders will receive shares of common stock of TerraSphere Systems Inc. The Company also announced today that its Board of Directors has approved the implementation of a 1-for-10 reverse split of its common stock, $.0001 par value per share effective at 12:01 a.m. on November 1, 2011.
Edward Gildea, President of Converted Organics, commented, "The Board Members and I believe that separating TerraSphere Systems from Converted Organics will benefit Converted Organics shareholders by reducing our cash outlays, and will enable TerraSphere Systems to pursue capital unencumbered with other unrelated Converted Organics businesses. We strongly believe in the viability of the TerraSphere business and in vertical urban agriculture in general. In the current capital markets it has been difficult raising funds to support TerraSphere and we have been advised that TerraSphere may have more success in raising capital as a stand-alone unit." Gildea continued, "The Board of Directors decided to implement the reverse split to increase the price of the stock in an effort to: support the spin-off of TerraSphere; enhance the Company's ability to access capital markets; and improve the Company's prospects with acquisition candidates, customers and vendors. We believe these actions will allow both companies to focus on pursuing specific business development opportunities that are appropriate and necessary for each to grow."
Details of the TerraSphere Spin-off
Converted Organics expects to complete the separation and special dividend of a portion of the TerraSphere shares over the next several months after completion of the required regulatory filings and disclosures. The percentage of TerraSphere shares to be distributed to Converted Organics shareholders will be determined by the Board of Directors at a later date. The record date for shareholders entitled to the dividend will be announced upon completion of the foregoing requirements. Following completion of the transaction, Converted Organics will continue to trade on the Over the Counter Bulletin Board (OTCBB:COIN) and TerraSphere Systems is also expected to trade on the OTCBB.
Details of the Reverse Stock Split
Effective November 1, 2011, immediately and without further action by Converted Organics stockholders, every ten (10) shares of pre-split common stock, par value $0.0001 per share, will automatically be converted into one (1) share of post-split common stock par value $0.0001 per share. The reverse split affects all issued and outstanding shares of the Company's common stock immediately prior to the effective date of the reverse split.
The split-adjusted shares of common stock will begin trading on the Over the Counter Bulletin Board Market on November 1, 2011. The Company's shares will trade under the symbol "COIND," with a "D" added for 20 trading days to signify that the reverse stock split has occurred. A new CUSIP number has been assigned to the Company's common stock as a result of the reverse split.
Shareholders who would otherwise receive fractional shares as a result of the reverse split will have their shares rounded up to the next whole share.
The shareholders of Converted Organics approved proposals authorizing the Board of Directors in its discretion, to implement the reverse split at the Annual Meeting of Stockholders held on June 13, 2011.
Additional details related to the reverse stock split may be obtained from the Company's Proxy Statement dated May 6, 2011 that was filed with the SEC on May 2, 2011. A copy of the Proxy Statement is available at www.convertedorganics.com under Investors > SEC Filings.
About TerraSphere Systems
TerraSphere designs and builds vertical farming systems that utilize minimal land, water and energy resources to produce fresh, pesticide-free produce regardless of climate or location, year round. TerraSphere's vertical farming technology is a highly efficient, automated plant production system that cost effectively grows crops in compact, safe, pollutant-free, environments. Since the technology is contained indoors, plants can be grown year-round in any geographical location, and are protected from weather related problems and biological threats, and therefore do not require chemicals or pesticides to ensure a healthy crop.
Vertical farming provides a valuable urban agricultural model that allows locally grown, fresh, pesticide-free produce to be cultivated within dense population centers, in close proximity to end consumers. Therefore, limited transportation is required between production site and market, which significantly reduces fuel usage and carbon emissions, associated with traditional production and distribution methods.
As a leader in vertical farming technology, TerraSphere Systems presents an innovative and sustainable solution to food supply challenges facing the world's growing population by providing a year-round supply of fresh, locally-grown, pesticide-free produce to urban and remote communities worldwide, while dramatically reducing agriculture's impact on global climate change.
To learn more about the advantages of TerraSphere Systems Vertical Farming visit www.terraspheresystems.com.
About Converted Organics
Converted Organics' (OTCBB:COIN) mission is to promote, develop and operate profitable innovative clean technologies that contribute to the improvement of our environment by use of sustainable business practices and the judicious use of natural resources. Converted Organics Inc. is currently composed of three primary lines of business at the intersection of Agriculture, Water and Waste Recycling. Each business contributes to our mission and uses sustainable business practices that protect and value the environment. The three lines of business are Organic Fertilizer (Converted Organics), Vertical Farming (TerraSphere Systems - www.terraspheresystems.com), and Industrial Wastewater Treatment (Industrial Wastewater Resources).
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This press release contains forward-looking statements that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. In some cases, you may identify forward-looking statements by words such as "may," "should," "plan," "intend," "potential," "continue," "believe," "expect," "predict," "anticipate" and "estimate," the negative of these words or other comparable words. Forward-looking statements include, the timing of the spin-off TerraSphere, the ability of TerraSphere to obtain financing as a stand-alone entity, and the future benefits to the Company's shareholders of making the spin-off . These statements are only predictions. One should not place undue reliance on these forward-looking statements. The forward-looking statements are qualified by their terms and/or important factors, many of which are outside the Company's control, involve a number of risks, uncertainties and other factors that could cause actual results and events to differ materially from the statements made. The forward-looking statements are based on the Company's beliefs, assumptions and expectations of our future performance, taking into account information currently available to the Company. These beliefs, assumptions and expectations can change as a result of many possible events or factors, including those events and factors described in the "Risk Factors" section in the Company's most recently filed annual report on Form 10-K, as updated in the Company's quarterly reports on Form 10-Q filed since the annual report, not all of which are known to the Company. Neither the Company nor any other person assumes responsibility for the accuracy or completeness of these statements. The Company will update the information in this press release only to the extent required under applicable securities laws. If a change occurs, the Company's business, financial condition, liquidity and results of operations may vary materially from those expressed in the aforementioned forward-looking statements.
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