CirTran Corporation (OTCBB: CIRC), an international contract manufacturer of energy beverages and other consumer products, announced it has entered into a new agreement that converts debt to equity, which included as an exhibit to its Current Report on Form 8-K filed yesterday with the Securities and Exchange Commission.
Iehab J. Hawatmeh, president of CirTran, said the agreement “continues to stabilize the company and better position it to move forward.
“Since December,” he said, “CirTran has benefitted from three favorable court rulings involving Playboy Energy Drink, manufactured and distributed exclusively by CirTran Beverage Corporation under a product license from Playboy Enterprises to Play Beverages. Now, with this agreement, we have even more positive news exemplified by a display of confidence in the company from a leading venture capital firm.”
Mr. Hawatmeh said the agreement with YA Global Investments, L.P. of Jersey City, N.J., includes a loan repayment schedule of $100,000 per month, commencing immediately and extending through March, 2015. CirTran owes YA Global an aggregate of approximately $4.0 million of principal and accrued interest on outstanding convertible debentures issued to YA Global's predecessor-in-interest in 2005 and 2006, and subsequently amended, restated and consolidated.
Between December 27, 2012, and March 15, 2013, YA Global converted an aggregate of $254,036 in amounts due under such convertible debentures to 297,459,076 shares of common stock, with the conversion price set forth in the debentures. Between December 20, 2012, and March 22, 2013, CirTran issued an aggregate of 504,000,000 shares for conversion of debt and services, aggregating $227,500. These issuances included Mr. Hawatmeh ($45,000 converted to 150,000,000 restricted shares) and directors Fadi Nora and Kathryn Hollinger ($45,000 and $7,500 converted to 150,000,000 and 25,000,000 restricted shares, respectively). And between December 20, 2012, and February 28, 2013, CirTran also issued (under a registration statement on Form S-8) an aggregate of 159,000,000 shares to unaffiliated employees and contractors in consideration for services rendered.