By Laura Lutz
Des Moines, Sept. 18 - Franklin Towers Enterprises, Inc. sold $2.5 million of secured convertible promissory notes in a private placement with eight investors, according to an 8-K filing with the Securities and Exchange Commission.
The notes mature on March 12, 2009 and bear interest at Prime rate plus 1,000 basis points.
Interest is payable either in cash equal to 115% of 5.55% of the principal amount or in stock. If it is paid in stock, the shares will be priced at the lesser of $0.25 and 75% of the average of the closing bid prices of the company's stock for the five trading days before the payment date.
Interest will be payable monthly beginning on March 12, 2008.
All principal and accrued interest on the notes is convertible into the company's common stock at $0.25 per share.
The investors also received class A warrants for 10,000,000 shares and class B warrants for 10,000,000 shares.
The class A warrants are exercisable at $0.50 per share, and the class B warrants are exercisable at $1.00 per share. The warrants will expire on the fifth anniversary of the date that a registration statement for the underlying shares is declared effective.
Franklin Towers is based in Center Barnstead, N.H., and plans to produce and sell raw silk through its subsidiary, Chongqing Qiluo Textile Co. Ltd.
| Issuer: | Franklin Towers Enterprises, Inc.
|
| Issue: | Secured convertible promissory notes
|
| Amount: | $2.5 million
|
| Maturity: | March 12, 2009
|
| Coupon: | Prime rate plus 1,000 bps
|
| Price: | Par
|
| Conversion price: | $0.25
|
| Warrants: | Class A warrants for 10,000,000 shares; class B warrants for 10,000,000 shares
|
| Warrant expiration: | Five years after registration statement is declared effective
|
| Warrant strike price: | $0.50 for class A warrants; $1.00 for class B warrants
|
| Settlement date: | Sept. 12
|
| Stock symbol: | OTCBB: FRTW
|
| Stock price: | $1.15 at close Sept. 12
|
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