Press Releases
Abakan Settles Lawsuit with Sonoro
May 22, 2015
MIAMI, FL--(Marketwired - May 22, 2015) - Abakan Inc. (OTCQB: ABKI) ("Abakan"), an emerging leader in the advanced coatings and metal formulations markets, today announced that it has entered into a Settlement Agreement with Sonoro Invest S.A. (“Sonoro”), in connection with a dispute regarding promissory notes for an aggregate principal amount of $2,105,000, which caused Sonoro to file a lawsuit against Abakan on October 1, 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 $4-5M to pay existing short term debt, finance the construction of a new powder production facility to increase powder production to 160 tons/year 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 $2,915,000 with interest at 5% payable in full on February 29, 2016. Should Abakan prepay the new note, on or before July 31, 2015, the amount required to satisfy the note will decrease to $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 $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 $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.
About Abakan Inc.
Abakan develops, manufactures, and markets advanced nanocomposite materials, innovative fabricated metal products and highly engineered metal composites for applications in the oil and gas, petrochemical, mining, aerospace and defense, energy, infrastructure and processing industries. Abakan’s technology portfolio currently includes high-speed, large-area metal cladding technology; long-life nanocomposite anti-corrosion and wear coating materials. Abakan's products have demonstrated longer life, higher productivity and extremely high strength-to-weight ratios compared to competing technologies. The Abakan group of companies has been honored by The Wall Street Journal as the #1 Manufacturing Innovation across the globe, by Pipeline Industries Guild as the Top Subsea Pipeline Technology, by Forbes as the #1 Most Promising Material Science Company in the United States, by American Metals Market with the Steel Excellence Award, by Inc. 500 as one of the Fastest Growing Manufacturing Company in the U.S., and has received numerous other trade, industry and technology awards including five R&D 100 Awards and a Technology Innovation Award from the National Institute of Standards and Technology. Over $50 million has been invested in product development and testing by federal agencies, national labs and our companies in order to deliver products that offer improved performance over the current state of art. Abakan has successfully introduced its PComP™ W for metal asset protection and life extension in the oil and gas and mining industries, and is currently focusing on the scale-up and commercialization of its highly disruptive metal cladding products for the oil and gas, oil sands, and mining industries. Abakan currently operates from multiple locations in United States, and intends to expand global operations in Canada, South-east Asia, Mexico and South America.
Forward-Looking Statements
A number of statements contained in this press release are forward-looking statements. These forward looking statements involve a number of risks and uncertainties including technological obsolescence, market acceptance of future products, competitive market conditions, and the sufficiency of capital resources. The actual results Abakan may achieve could differ materially from any forward-looking statements due to such risks and uncertainties. Abakan encourages the public to read the information provided here in conjunction with its most recent filings on Form 10-K,Form 10-Q and 8-K. Abakan’s public filings may be viewed at www.sec.gov.
Abakan Inc.
Robert Miller, Chief Executive Officer
Phone: 786-206-5368
Email: [email protected]
www.abakaninc.com
Investor Relations
Surety Financial Group, LLC
Phone: 410-833-0078
www.suretyfingroup.com