News for 'ESNR' - (Electronic Sensor Technology Announces Recapitalization Agreements)
NEWBURY PARK, Calif., Feb 27, 2008 (BUSINESS WIRE) -- Electronic Sensor
Technology (EST) (OTCBB:ESNR), a leading provider of innovative homeland
security and environmental solutions, announced it has signed a letter of intent
from an investor to provide additional capital to the company and an agreement
that would extinguish the company's existing $7 million convertible debentures.
Barry S. Howe, President and CEO, stated, "We are very pleased to enter into
these agreements. These transactions will provide the company with $2.0 million
in additional capital to allow the company to continue its strategy of expanding
its global sales and marketing capabilities and for the development of next
generation products. In addition, they will greatly simplify and strengthen the
company's capital structure."
The letter of intent from a prominent Malaysian investor provides for a total
investment of $5.5 million. $3.5 million will be in the form of common stock at
the lesser of $0.08 per share or 90% of the closing price on the day preceding
the closing. $2.0 million will be in the form of a new 9% convertible debenture.
The debenture is convertible into common stock at a 20% premium to the common
stock purchase price.
The agreement with the existing debenture holders calls for a payment of $3.5
million plus approximately 10,000,000 shares of common stock in full
satisfaction of the debentures. The debenture holders have also agreed to the
cancelation of one-half of the 12.2 million of warrants exercisable at $0.43 per
share.
The company expects these transactions to close in approximately one month. Upon
completion of the transactions, the new investor will own between 39 and 44% of
the company's common stock, depending upon the closing price. The current
debenture holders will own approximately 13% of the company's common stock. Both
of these agreements will be included in a current report on Form 8-K to be filed
with the SEC.
About Electronic Sensor Technology:
Electronic Sensor Technology develops, manufactures, sells, and supports a
product line of patented chemical vapor analyzers. The ultra high-speed gas
chromatography coupled with a solid-state detector enables analysis of nearly
any odor, fragrance, or chemical vapor within ten seconds. We believe that the
company's product line is strategically positioned to address key needs of the
homeland security market, environmental and quality assurance applications, and
product quality of food and beverage.
SEC Filings and Forward-Looking Statements
Certain statements in this release, including those relating to revenue
expectations; the company's plans regarding business and product development;
product sales and distribution; the sufficiency of the company's resources to
satisfy operation cash requirements; and future capital investment by
prospective investors are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
may contain the words "believe," "anticipate," "expect," "predict," "hopeful,"
"estimate," "project," "will be," "will continue," "will likely result," or
other similar words and phrases. Risks and uncertainties exist that may cause
results to differ materially from those set forth in these forward-looking
statements. Factors that could cause the anticipated results to differ from
those described in the forward-looking statements include: failure to come to
terms with prospective investors, risks related to changes in technology, our
dependence on key personnel, our ability to protect our intellectual property
rights, emergence of future competitors, changes in our largest customer's
business and government regulation of homeland security companies, and other
factors described under the heading "Risk Factors" in our Registration
Statements on Form SB-2 File Nos. 333-130900 and 333-138977, effective as of
November 21, 2006 and December 21, 2006, respectively, as amended and
supplemented. The forward-looking statements speak only as of the date they are
made. We do not undertake to update forward-looking statements to reflect
circumstances or events that occur after the date that the forward-looking
statements are made.
SOURCE: Electronic Sensor Technology
