On Jan. 23, SmarTire Systems Inc. entered into an agreement providing for the sale of convertible debentures in the amount of up to $1.8 million. The company sold one convertible debenture for gross proceeds of $684,000.
Per the agreement, SmarTire may sell convertible debentures for the balance of up to $1,116,000 at any time over the next six months. Terms of the financing are disclosed in the company's 8-K filed Jan. 26, 2007.
(On Nov. 8, 2006, the company completed a $1.2 million financing deal that resulted in net proceeds of $1,070,000. Terms of the financing also were disclosed in an 8-K filing.)
"As reported on Dec. 10, 2006, our first-quarter results showed a continuing trend of year-on-year revenue growth, and major players in the commercial vehicle industry have advised us that they plan to begin ordering our products," says SmarTire CFO Jeff Finkelstein. "This indication was further supported last week with the announcement by DaimlerChrysler Commercial Buses that they will begin supplying SmarTire products to their customers.
"As this revenue growth trend continues throughout 2007, it is most important that we have the working capital necessary to respond to this increase in product demand. The actions recently undertaken to reduce our operating costs and the infusion of the net proceeds from the first tranche of this financing represent major steps in satisfying our working capital requirements going forward."
SmarTire Systems posted a net loss of $5.3 million on revenue of $851,799 for the first quarter of its 2007 fiscal year. That compares to a net loss of $17.8 million on sales of $592,866 for the first quarter of fiscal year 2006.
For more information on SmarTire Systems, which develops and markets proprietary advanced wireless sensing and control systems worldwide under the SmartWave trademark, visit www.smartire.com.
