A4S Security Announces Completion of $5.2 Million Private Placement
03 Octubre 2006 - 2:12PM
PR Newswire (US)
LOVELAND, Colo., Oct. 3 /PRNewswire-FirstCall/ -- A4S Security,
Inc. (Nasdaq: SWAT, SWATW; NYSE Arca), a leading provider of
digital video surveillance solutions, today announced that it has
completed a private placement of unregistered securities totaling
$5,223,750. Greg Pusey, A4S's Chairman stated: "This important
financing results in a strong cash position for A4S, exceeding $5
million, and allows us to further advance the pending Vizer / Avurt
acquisitions and accelerate our combined sales, marketing and
development efforts. We are also very pleased that two well
respected investment funds, including Vision Opportunity Master
Fund, Ltd., have made sizable investments in our company. Based on
discussions with our new institutional investors we are optimistic
that additional funds could potentially be available to us through
the subsequent exercise of the short term warrants which could help
finance future growth." Pusey went on to state "The closing of this
offering combined with a successful subsequent shareholder vote
would allow finalization of the pending Vizer / Avurt merger and
the conversion of the notes issued in this offering to equity, well
positioning us to advance our goals". Tom Marinelli, A4S's CEO
stated "The A4S and Vizer / Avurt teams are beginning to explore
ways to work together and are rapidly developing plans for
integrating people and processes to maximize the combination of
capabilities to enhance the Company's overall effectiveness. The
complementary knowledge base of our collective companies is already
beginning to pay dividends in the recently announced dynamic light
rail system we expect to install in the 4th quarter of 2006 for the
Greater Cleveland Regional Transit Authority. This Cleveland
project is one of the first major installs utilizing our next
generation TVS 300 product. We believe it is indicative of a higher
level of market interest in the product's collective benefits of
uncompromising video quality, wireless viewing capabilities, and
data management features in an easy to use package. Scott Sutton,
President and Founder of Vizer / Avurt commented "I am pleased to
see the funding completed and to start the process of combining our
talents, initially focusing on the sophisticated installation in
Cleveland. The ShiftWatch technology has numerous applications that
should require only a modest R&D funding to release additional
solutions into the market. We recently completed testing on the
bench prototype of our Avurt launcher, personal protection device
in development and expect to take delivery of our first five
prototypes in the month of October. We remain very excited about
the market for our launcher including additional variations off of
our initial design and look forward to providing video footage of
it in use on our web site once it is complete." Summary of the
Offering A total of $2,772,000 was closed consisting of 792,000
common share units at $3.50 per unit ("Common Share Units") with
each Common Share Unit including one share of A4S common stock
("Common Stock") and three warrants ("Investor Warrants") to
acquire Common Stock. Additionally a total of $2,451,750 was closed
consisting of 700,500 convertible promissory note units ("Note
Units") at $3.50 per unit with each Note Unit consisting of a 5.13%
per annum Convertible Promissory Note ("Note") due January 31,
2007, unless earlier converted, and three Investor Warrants. Each
$3.50 of principal (plus interest) due under the Notes will
automatically be converted into one share of A4S Series A
Convertible Preferred Stock ("Series A Preferred Stock") upon
shareholder approval of such conversion. Approval for the
conversion right is planned to be sought at a special meeting of
A4S's shareholders scheduled for the fourth quarter of 2006. The
Series A Preferred Stock is non-voting, pays no dividends, contains
no liquidation preference and is convertible into one share of
Common Stock for each share of Series A Preferred Stock owned.
Investor Warrants consist of three separate warrants with the
following terms: Warrant "A" is exercisable at $4.75 per share and
expires four years from closing; Warrant "B" is exercisable at
$4.75 per share and expires 18 months from closing; and Warrant
"SWATW"'s terms mirror exactly the current publicly-traded A4S
warrants, trading under the symbol: SWATW. Generally, the SWATW
Warrants are exercisable at $9.00 per share, expire in July 2010
and are redeemable by A4S beginning on July 18, 2008 for $0.10
each, under defined conditions, including a minimum trading price
of the Common Stock of $13.50 per share. A4S will use its
reasonable best efforts to obtain the same CUSIP number for the
"SWATW" Warrants issued in the private placement (the "new SWATW
Warrants") as is assigned to A4S's current publicly-traded "SWATW"
Warrants (the "existing SWATW Warrants") so that following
registration of the new SWATW Warrants they will trade with the
existing SWATW Warrants. If A4S is unable to do so prior to the six
month anniversary of the closing, the new SWATW Warrants shall
thereupon be exchanged for a warrant, identical in form to Warrant
"A" and Warrant "B" issued at the closing, except that the exercise
price shall be $8.00 per share and the expiration date shall be
July 18, 2010. All warrants shall be exercisable in cash,
commencing six months after the closing and contain anti-dilution
rights for stock splits and stock dividends. A4S has agreed to file
a registration statement with the Securities and Exchange
Commission (the "SEC") for the shares of Common Stock underlying
the Common Share Units and the Note Units within 90 days of the
closing. The registration statement will also register the new
SWATW Warrants (unless they have been replaced as discussed above,
in which case they will not be registered). Failure to file the
registration statement within 90 days of the closing or failure to
get the registration statement effective 180 days from the closing
would require A4S to pay each investor a penalty fee in cash equal
to 2% per month up to a maximum of 10% of their investment. The
offering was made to accredited investors, including $3,010,000
purchased by the lead investor, Vision Opportunity Master Fund,
Ltd., a new investor in A4S. An additional investment totaling
approximately $135,000 was also made by A4S's Chairman and his
family members subject to shareholder approval. The purpose of the
private placement is to raise funds to support the recently
announced pending acquisitions of Vizer Group, Inc., and Avurt
International, Inc., and for ongoing product development and for
working capital and general corporate purposes. None of the Common
Stock Units, the Note Units, the shares of Common Stock or Series A
Preferred Stock underlying such Units or the warrants included in
the Units are registered under the Securities Act of 1933, as
amended, and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements. This press release shall not constitute an offer to
sell or the solicitation of an offer to buy in any jurisdiction.
Bathgate Capital Partners LLC served as placement agent for the
offering and is being compensated with a commission of not more
then 8%, a non-accountable expense allowance of 2% and warrant
rights for up to 20% of the common shares and convertible notes
sold in the offering at exercise prices ranging from $4.92 to $5.00
each. About A4S Security, Inc. A4S Security, Inc. develops and
markets the ShiftWatch(R) product line of mobile digital video
surveillance solutions for public transportation, law enforcement
and general security applications. The company's full motion, high
resolution video system utilizes patent pending video streaming
technology and GPS synchronization capabilities to provide agencies
with data security and reliability. The company's open, standards
based architecture, facilitates interoperability, easing management
of the information and communication complexities and leveraging
customers' investment in the future. For additional information
about A4S Security and ShiftWatch solutions, call 1-888-825-0247 or
visit http://www.shiftwatch.com/. For additional information about
Vizer visit http://www.vizergroup.com/ and for Avurt visit
http://www.non-lethal.com/. Information on the web sites does not
comprise a part of this press release. A4S intends to file with the
SEC a proxy statement and other relevant documents in connection
with the conversion of the Notes issued in the private placement
and the proposed Vizer / Avurt merger. Investors and security
holders of A4S are urged to read the proxy statement and other
relevant documents when they become available because they will
contain important information about A4S, the conversion of the
Notes and the proposed merger. Investors and security holders of
A4S may obtain free copies of the proxy statement and other
relevant documents when they are filed with the SEC at the SEC's
website at http://www.sec.gov/. In addition, investors and security
holders of A4S may obtain free copies of the proxy statement by
writing to A4S Security, Inc., 489 N. Denver Avenue, Loveland, CO
80537. A4S and its directors, executive officers and certain
employees may be deemed to be participants in the solicitation of
proxies in connection with the conversion of the Notes issued in
the private placement and the proposed merger. Information
regarding A4S's directors and executive officers are detailed in
its annual and quarterly reports on Form 10-KSB and Form 10-QSB,
respectively, previously filed with the SEC, and in its proxy
statement to be filed with the SEC. This press release includes
"forward looking statements" as defined by the Securities and
Exchange Commission (the "SEC"). All statements, other than
statements of historical fact, included in the press release that
address activities, events or developments that the company
believes or anticipates will or may occur in the future are
forward-looking statements. These statements are based on certain
assumptions made based on experience, expected future developments
and other factors the company believes are appropriate under the
circumstances. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of the company and may not materialize. Investors are
cautioned that any such statements are not guarantees of future
performance. Actual results or developments may differ materially
from those projected in the forward-looking statements as a result
of many factors, including the company's ability to receive
shareholder approval for the conversion of the Notes, the company's
ability to receive shareholder approval for and consummate the
Vizer and Avurt acquisitions, the ability of the Vizer / Avurt
management team to successfully implement their business plans, the
company's ability to integrate Vizer's and Avurt's businesses with
the company's operations, and the company's ability increase sales
of its products, and enhance, execute and protect its technological
capabilities, among others. Furthermore, the company does not
intend (and is not obligated) to update publicly any
forward-looking statements, except as required by law. The contents
of this release should be considered in conjunction with the
warnings and cautionary statements contained in the company's
recent filings with the SEC. CONTACT: Thomas Marinelli (248)
797-8558 or Greg Pusey (303) 722-4008 A4S Security, Inc.
DATASOURCE: A4S Security, Inc. CONTACT: Thomas Marinelli,
+1-248-797-8558, or Greg Pusey, +1-303-722-4008, both of A4S
Security, Inc. Web site: http://www.shiftwatch.com/
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