per 8k, 9.27.07
As of the date of this Current Report, the Company has 30,250,000 shares of common stock issued and outstanding and 5,000,000 shares of Series A Convertible Preferred Stock which are convertible into 52,880,000 shares of common stock.
On September 12, 2007, Franklin Towers Enterprises, Inc., entered into Subscription Agreements with 8 accredited investors for the purchase and sale of $2,500,000 of Secured Convertible Promissory Notes of the Company. The Company received net proceeds from the issuance of the Notes of $2,272,500. Pursuant to the terms of the Subscription Agreements, we also issued to the Purchasers warrants to purchase an aggregate of 20,000,000 shares of common stock of the Company, subject to adjustments for certain issuances and transactions. In accordance with the terms of the Subscription Agreements, additional Notes in the principal amount of $2,500,000 and the issuance of an aggregate of 20,000,000 additional warrants will be issued in one or more subsequent closings. The next closing is to occur within 10 days.
The Notes bear interest at the rate of prime plus 10% per annum, payable in either (a) cash equal to 115% of 5.55% of the initial principal amount of the Note or (b) absent any event of default, in shares of our common stock at the lesser of (i) $0.25 per share or (ii) 75% of the average of the closing bid prices of our common stock for the 5 trading days preceding the payment date.
All principal and accrued interest on the Notes is convertible into shares of our common stock at the election of the Purchasers at any time at the conversion price of $0.25 per share, subject to adjustment for certain issuances, transactions or events that would result in “full ratchet” protection to the holders.
As part of the financing, we also issued to the Purchasers an aggregate of 10,000,000 Class A Common Stock Purchase Warrants and 10,000,000 Class B Common Stock Purchase Warrants. The Class A Warrants are exercisable at a price of $0.50 per share at any time until the fifth anniversary from the date the Registration Statement is declared effective by the Security and Exchange Commission (the “Expiration Date”) and the Class B Warrants are exercisable at a price of $1.00 per share at any time until the Expiration Date
On September 24, 2007, the Company terminated the Offering, after it sold 3,250,000 of Secured Convertible Promissory Notes for the principal purchase price of $3,250,000, resulting in $2,947,500 of net offering proceeds.
