By Laura Lutz
Des Moines, Sept. 25 - Franklin Towers Enterprises, Inc. sold another $750,000 of secured convertible promissory notes in its private placement, bringing the total raised to $3.25 million.
The placement, which was intended to raise up to $5 million, has now finished.
As previously reported, the company sold $2.5 million of the notes to eight investors on Sept. 12. The second tranche, which closed on Sept. 20, included three additional investors.
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.
The principal and accrued interest on the notes is convertible at $0.25 per share.
The investors also received class A warrants for 12,000,000 shares and class B warrants for 12,000,000 shares.
The company issued 10,000,000 class A warrants and 10,000,000 class B warrants in the Sept. 12 tranche. The remainder was issued in the Sept. 20 tranche.
The class A warrants are exercisable at $0.50 per share, and the class B warrants are exercisable at $1.00 per share. The warrant will expire on the fifth anniversary of the date that a registration statement for the underlying shares is declared effective.
Based in Center Barnstead, N.H., Franklin 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: | $3.25 million
|
| Maturity: | March 12, 2009
|
| Coupon: | Prime rate plus 1,000 basis points
|
| Price: | Par
|
| Conversion price: | $0.25
|
| Warrants: | Class A warrants for 12,000,000 shares; class B warrants for 12,000,000 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 (for $2.5 million); Sept. 20 (for $750,000)
|
| Stock symbol: | OTCBB: FRTW
|
| Stock price: | $1.15 at close Sept. 12
|
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