SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
July 28, 2003 |
Date of Report (date of earliest event reported) |
SmarTire Systems Inc. |
(Exact Name of Registrant as Specified in its Charter) |
Yukon | 0-24209 | N/A |
(State or Other Jurisdiction | (Commission | (IRS Employer |
#150 - 13151 Vanier Place, Richmond, British Columbia, V6V 2J1 |
(Address of principal executive offices) |
(604) 276-9884 |
(Registrant's telephone number, |
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ITEM 5. OTHER EVENTS
Pursuant to Rule 135c of the Securities Act of 1933, as amended, a press release with respect to new financing arrangements is appended to this Current Report on Form 8-K as exhibit 99.1.
Convertible Debentures
SmarTire sold to four accredited investors 8% Convertible Debentures in the aggregate principal amount of US$1,700,000 due in three years, and issued share purchase warrants entitling the investors to acquire up to an aggregate of 13,076,922 shares of SmarTire common stock at an exercise price of $0.1771 per share for a term of five years. Under terms of the Convertible Debenture, SmarTire agreed to file a registration statement with the Securities and Exchange Commission under the Securities Act of 1933, as amended within thirty days. SmarTire is obligated to pay certain finders' fees and legal costs in connection with the private placement.
The Convertible Debentures bear interest at the rate of 8% per annum, payable quarterly in cash or, subject to certain limitations, in shares of common stock. Principal and accrued interest under a Convertible Debenture issued may be converted by the holder in whole or in part and from time to time at a conversion price of $0.13 per share
Equity Line of Credit Facility
SmarTire has also arranged for a $15.0 million equity line of credit facility from Talisman Management Limited. SmarTire may draw down the facility at its discretion to receive proceeds in payment for shares of common stock payable upon determination of the weighted average price of SmarTire's trading price over the next two consecutive 10 day trading priods, provided that each draw down must be at least six days apart, and the maximum amount that may be drawn down at any one time is limited to the greater of $300,000 and 12.5% of the average of the VWAPs for the thirty (30) day period immediately prior to the date of the Draw Down Notice multiplied by the total aggregate trading volume in respect of the Common Stock for such period; provided that no Draw Down shall be less than $300,000. The term of the equity line of credit is 36 months, but may be terminated jointly by SmarTire and Talisman Management Limited at any time. SmarTire is issuing to the investor 1,000,000 warrants and to the finder 250,000 warrants all exercisable for 5 years. SmarTire is also obligated to pay certain finders' fees and legal costs in connection with the equity line of credit and on each drawdown.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibits
99.1 Press release issued by the Registrant on July 28, 2003
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SMARTIRE SYSTEMS INC.
By/s/ Jeff Finkelstein
Jeff Finkelstein, C.A.
Chief Financial Officer
Dated: July 28, 2003
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NEWS RELEASE - July 28, 2003
Email: investor_relations@smartire.com
Contact: Judy Leclercq
1.800.982.2001
SmarTire Announces Two New Financings
Additional funding totaling $16.7M enables Company to pursue significant opportunities worldwide
RICHMOND, BRITISH COLUMBIA, CANADA: July 28, 2003 - SmarTire Systems Inc. (SMTR: OTCBB) announces that it has closed two financings representing $16.7 million. The financings include a $1.7 million debenture convertible into shares and warrants and a $15.0 million equity line of credit. Terms of these financings will be released in the Company's 8-K filing. The equity line of credit will be accessed if necessary and may complement possible future fundings such as additional equity or debt financings. No additional financing is currently contemplated by the Company.
Proceeds from the completed financings will be used to retire debt, purchase inventory, fund ongoing operations, and satisfy current and projected product demand. The Company's investment banker introduced SmarTire to the investors and arranged for the financing. This latest round brings to date $19.85 million in total financings arranged by its investment banker.
Robert Rudman, President and CEO of SmarTire stated, "The Company arranged this equity line of credit to assure its partners, suppliers and potential customers that SmarTire has the financial resources necessary to deliver on current and future orders."
SmarTire Systems Inc. develops and markets proprietary tire monitoring systems for the transportation industry worldwide. Incorporated in 1987, SmarTire is a public company with offices in North America and Europe. Additional information can be found at www.smartire.com.
Jeff Finkelstein, C.A.
Jeff Finkelstein, C.A.
Chief Financial Officer
Safe Harbor Statement.
This news release includes statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. It is important to note that the Company's actual results could differ materially from those in such forward-looking statements. Readers should refer to the risk disclosures outlined in the Company's annual report of Form 10-KSB for the last completed fiscal year filed with the SEC.
