Neotel International Inc. announced today that a non-brokered Convertible Secured Debenture to raise gross proceeds of $400,000 has closed. The Debentures will be governed by debenture certificates to be dated as of the closing date, August 22, 2008, and will not be listed for trading on the TSX Venture Exchange or any other public market.
The Debentures will mature, unless earlier converted into Debenture Units, on August 22, 2010 and will bear interest of 12% per annum calculated and payable semi annually in arrears from the closing date.
Each Debenture will be convertible at the holder's option at any time from the closing date to maturity at $0.07 per Unit. Each Unit is comprised of one common share and one common share warrant (a Debenture Warrant). Each Debenture Warrant entitles the holder to purchase one common shares at a price of $0.13 for a period of two (2) years from the date of conversion of the Debentures.
The Company will have the option to redeem the Debentures at par plus accrued and unpaid interest at any time by providing notice not less than 30 days and not more than 60 days of its intent to redeem.
All securities issued in connection with the debenture are subject to a resale restriction for a period of four (4) months from the date of issue.
The company is restructuring operations to reduce costs and the proceeds of the financing will be used for working capital purposes and to complete product development projects. -- www.cnxmarketlink.com
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