Inseq cancels $10 million equity line

By Sheri Kasprzak

New York, Sept. 26 - Inseq Corp. said it terminated a $10 million standby equity distribution agreement with Cornell Capital Partners, LP.

The company also canceled 300 million shares that were issued to Cornell as part of the equity line.

Inseq had planned to use the proceeds from the equity line to pay off debt in order to conduct a short-term bridge financing to pay for its acquisition of Independent Metal Sales, Inc.

"However, the recent performance of Inseq stock, the aggregate growth capital needs of IMS and our existing business and the anticipated cash needs of our other currently targeted acquisitions require us to use our capital structure differently," said the company's chairman Kevin Kreisler in a statement.

"We believe that a better use of our capital today would be to use a less expensive and more flexible source of conventional debt financing that we service exclusively out of cash flows, as opposed to equity sales and standard equity financing at higher market prices - particularly as compared to the newly canceled warrants that Inseq had issued as part of the SEDA, which were exercisable into 300 million shares at $0.001 per share."

Because of the canceled SEDA, Inseq said its acquisition of IMS will be delayed by 60 days as the company enters into its proposed debt financing.

Based in Mount Arlington, N.J., Inseq acquires companies that manufacture commodities, such as metals, plastics and fuels, and operates them to use and reuse their products and byproducts for other materials.

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