FT. LAUDERDALE, Fla., April 9 /PRNewswire-FirstCall/ -- InkSure Technologies Inc. (BULLETIN BOARD: INKS) , a leading provider of covert machine-readable security solutions for the prevention of counterfeiting, fraud and diversion and developer of "chipless" RFID technology for affordable item-level secure logistics and track-and-trace applications, today completed a private placement with an existing institutional investor of Senior Secured Convertible Notes and Warrants for gross proceeds of $3,000,000.
InkSure will use the proceeds of this private placement for general corporate purposes, including furthering the research and development of its "chipless" RFID technology. "The feedback on our new SARcode chipless RFID technology has been extremely positive due to its capabilities of printing a covert, non-line of sight symbology at less than a cent," stated Elie Housman, CEO of InkSure Technologies. "This new financing will enable us to expand our pilot testing and commercial launch plans."
In connection with the private placement, InkSure issued $3,000,000 principal amount of new Senior Secured Convertible Notes and exchanged $6,000,000 principal amount of existing Convertible Notes issued in December 2005 for the same principal amount of Amended and Restated Senior Secured Convertible Notes (together with the $3,000,000 principal amount of new Senior Secured Convertible Notes, the "Notes"), each of which is convertible into shares of InkSure common stock at a conversion price of $0.60, subject to adjustment, and mature on September 30, 2010. The Notes are the senior obligations of InkSure and are secured by the assets of InkSure and its subsidiaries and guaranteed by each of its subsidiaries. The investors may require InkSure to redeem all or any portion of the outstanding principal amount of the Notes in cash plus accrued but unpaid interest on or after September 30, 2009. Interest on the Notes will accrue at a rate of 6.0% per year, payable quarterly in arrears in cash. $750,000 of the proceeds of the private placement will be placed into a collateral account to secure the interest payments on the Notes.
InkSure can require the investors to convert all or any portion of the Notes into shares of common stock if, among other things, the volume weighted average price of the common stock exceeds $1.20 for any 20 trading days in any 30 consecutive trading day period. Upon any such conversion, the investors will be entitled to receive any cash remaining on deposit in the collateral account.
InkSure can also redeem the Notes at any time by paying the investors a premium of 5%-25% of the outstanding principal amount of the Notes (based upon the time of redemption) plus interest and the amounts in the collateral account. At the time of such redemption InkSure will also issue to the investors warrants to purchase common stock in an amount equal to the number of shares underlying the redeemed Notes, expiring September 30, 2010, at an exercise price of $0.60.
In addition, InkSure issued to the existing institutional investor purchasing the new Senior Secured Convertible Notes, warrants to acquire 3,570,337 shares of common stock at an exercise price of $0.60. These warrants have a term of ten years.
The securities sold in the private placement and the shares issuable upon the conversion of the Notes and upon the exercise of the warrants have not been registered under the Securities Act of 1933, as amended, or state securities laws, and may not be offered or sold in the United States without being registered with the Securities and Exchange Commission ("SEC") or through an applicable exemption from SEC registration requirements.
This news release is not an offer to sell or the solicitation of an offer to buy the shares of common stock of InkSure.
About InkSure Technologies Inc.
InkSure Technologies Inc., with its corporate headquarters in Ft. Lauderdale, Florida and its research and development center in Science Park, Rehovot, Israel, specializes in comprehensive, covert security solutions designed to protect high profile brands and documents of value from counterfeiting, fraud and diversion. The Company's sales and marketing activities target a number of market opportunities, including financial, pharmaceutical, branded products, transportation, and government/institutional, on a global scale. The Company's R&D activities include the development of "chipless" RFID technology for affordable item-level secure logistics and track-and-trace applications. The Company's common stock is listed on the OTC Bulletin Board under the symbol "INKS". Additional information on the Company is available on its website at http://www.inksure.com/.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Although InkSure (the "Company") believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. Important factors that could cause actual results to differ materially from the forward-looking statements include the Company's need to obtain substantial additional capital (through financings or otherwise) to fund its operations, the progress of development, government and regulatory approvals and licensing/commercialization of the Company's technologies, and other factors noted in the Company's periodic report filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
For further information, please contact:
Mickey Brandt, CFO, InkSure at 972-8-9365583 ext 106 or via email at
