By Sheri Kasprzak
New York, Nov. 8 - eTotalSource, Inc. has completed a private placement of convertible debentures for $1 million to consolidate two convertible debentures from 2004.
The 12% debentures issued to Cornell Capital Partners, LP mature in three years and are convertible into shares at the lesser of 120% of the closing bid price of the company's stock on the date of conversion or 80% of the lowest closing bid price for the five trading days before conversion.
The debentures are redeemable at a 20% premium plus interest. If the debentures are redeemed, Cornell will receive a warrant for 2 million shares, exercisable at $0.001 each.
The debentures consolidate a $175,000 debenture issued Oct. 7, 2004 to Cornell, a $175,000 debenture issued on Dec. 2, 2004 and a $100,000 debenture issued on Aug. 19.
The additional funding from the new debentures totals $550,000.
Under the terms of the debenture offering, the company also terminated its $10 million standby equity distribution agreement it entered into with Cornell on Oct. 4, 2004.
Based in Yuba City, Calif., eTotalSource develops training software for use in the law enforcement, medical and defense sectors.
| Issuer: | eTotalSource, Inc.
|
| Issue: | Convertible debentures
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| Amount: | $1 million
|
| Maturity: | Three years
|
| Coupon: | 12%
|
| Price: | Par
|
| Yield: | 12%
|
| Conversion price: | Equal to the lesser of 120% of the closing bid price on the date of conversion or 80% of the lowest closing bid price for the five trading days before conversion
|
| Call: | Redeemable at a 20% premium to the amount being redeemed plus interest
|
| Warrants: | For 2 million shares, if redeemed
|
| Warrant strike price: | $0.001
|
| Investor: | Cornell Capital Partners, LP
|
| Settlement date: | Nov. 2
|
| Stock price: | $0.02 at close Nov. 2
|
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