SmarTire Systems Inc. has entered into an agreement providing for the sale of up to $1.5 million in convertible debentures to a subsidiary of Cornell Capital Partners LP.
On April 27, 2007, SmarTire sold one convertible debenture under this agreement for gross proceeds of $1.15 million. The agreement provides that SmarTire may sell convertible debentures for the balance of up to $350,000 at any time until Oct. 1, 2007. (Terms of the financing are disclosed in the company's 8-K filed May 1.)
SmarTire intends to use the net proceeds of this financing offering for general corporate purposes, including working capital.
"We are pleased that Cornell has demonstrated its continued support of our strategy and vision, as evidenced by its second financing with the company this calendar year," says SmarTire CFO Jeff Finkelstein.
SmarTire Systems recorded a net loss of $5.3 million on revenue of $946,665 for the second quarter of its fiscal year 2007 ended Jan. 31, 2007. That compares to a net loss of $3.9 million on sales of $839,615 for the same period in 2006.
