CirTran Secures $1.5 Million in Financing
CirTran Corporation, a full-service contract manufacturer of IT, consumer and consumer electronics products, announced recently that it has received $1.5 million in financing through a securities purchase agreement with Cornell Capital Partners.
Iehab J. Hawatmeh, founder and president of CirTran, said the funding agreement was based on a 5% secured debenture, due April 23, 2009. As part of the transaction, he said CirTran paid a commitment fee of $120,000 and a structuring fee of $15,000, with net proceeds to the company of $1,365,000.
"As CirTran moves forward with our strategic business plan into the fourth quarter and fiscal 2007, we will use these funds for general corporate and working capital," Mr. Hawatmeh said. "This will include our off-shore manufacturing business, which focuses on the direct response/sold-on-TV marketplace, for our new marketing divisions, which concentrate on that market, and in our core contract technology-based manufacturing business in Salt Lake."
Mr. Hawatmeh said that the agreement calls for Cornell, at its option, to convert all or part of the principal amount owed under the Debenture into shares of CirTran common stock at a conversion price equal to the lowest closing bid price for the 20 trading days immediately preceding the conversion date, except as otherwise set forth in the debenture. Cornell, he said, may also convert up to $500,000 worth of the principal amount, plus accrued interest of the Debenture, in any consecutive 30-day period when the price of CirTran stock is $0.03 per share or less at the time of conversion.
"CirTran is appreciative of the continued support of the private investment community," said Mr. Hawatmeh. "Cornell has shown faith in CirTran and our strategic plan over years, as evidenced by this debenture which comes due in 2009. Most recently, ANAHOP, another private investor, has made multiple stock purchases and entered into a forward-looking program based on warrants and the future. Our primary goal," he said, "is to continue to work to reward our shareholders and private investors alike."