SmarTire Systems Inc. has completed a major financing with Cornell Capital Partners LP that has resulted in net proceeds of $11 million. A $160 million Standby Equity Distribution Agreement also is part of the financing.
The company issued convertible debentures totaling $30 million that bear interest at a rate of 10% per annum, have a term of three years, and are convertible into common stock at $0.1125 per share. Also included in this financing are 62.5 million warrants with an exercise price of $0.16 per share.
Cornell Capital is a New Jersey-based investment fund managed by Yorkville Advisors Management LLC. Complete terms of the financings will be released in SmarTire's 8-K filing.
"This major financing represents one of the most important milestones in the history of our company," says Jeff Finkelstein, SmarTire's chief financial officer. "Completion of this financing sends a very clear and positive message to our customers, suppliers and strategic partners that SmarTire now has the resources necessary to execute on its business plan.
"The company has expanded its business strategy beyond tire monitoring opportunities to include a wider range of wireless sensing and control applications that utilize SmarTire's patented technologies. This financing enables us to launch and maintain a long-term sales and marketing program into this exciting market sector."
