SmarTire receives more than $1 million in financing
SmarTire Systems Inc. has completed a $1.2 million financing that resulted in net proceeds of $1,070,000. Terms of the financing are disclosed in the company's 8-K filed today.
"This funding provides us with short-term working capital to continue the execution of our business strategy which is to focus on the commercial vehicle marketplace," says CFO Jeff Finkelstein.
The convertible debentures were offered only to two accredited investors in reliance on an exemption from the registration requirements of the Securities Act of 1933.
In connection with the offering, SmarTire agreed to file a registration statement under the Securities Act covering the resale of the shares of SmarTire's common stock underlying the convertible debentures.
SmarTire posted a net loss of $29.4 million on record revenue of $3.5 million for its fiscal year ended July 31, 2006. That compared to a net loss of $16.1 million on revenue of $1.46 million for the company's previous fiscal year.
SmarTire says the year-to-year loss increased significantly primarily due to non-cash interest charges of $23.2 million in fiscal year 2006, compared to $3.6 million in fiscal year 2005.
"We made progress this year on several fronts," says SmarTire CEO and President Dave Warkentin. "Our partnership with Dana Corp. has propelled our company to a promising new level.
"Since signing our marketing and distribution agreement last October, Dana has represented SmarTire at numerous conferences and helped us expand our sales and distribution channels. New customers include companies such as Prevost, Camping World, Medtec, Pierce, Van Hool, Fleetwood, ABC and others. This played an important role in the 136% increase in revenue. The result is a strengthened business model that makes us optimistic about the years ahead.
"Our current plan for fiscal year 2007 is to continue to expand sales into the commercial vehicle market and achieve another year of revenue growth," said Warkentin.