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Intelligent Imaging
Informatics |
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Guardian Technologies
International, Inc. Announces First Closing of Financing
Other Topics:
iPod Health Organizer,
Webcast Health Research
Guardian Technologies
International, Inc.
November 8, 2006
Herndon, VA -- Guardian Technologies International, Inc. (OTCBB:
GDTI), a leading provider of high-performance security and
healthcare solutions based on “Intelligent Imaging Informatics”
(3iTM), today announced that, pursuant to the terms of a
securities purchase agreement with a group of institutional
accredited investors, it successfully completed the first of two
closings of a private placement of its securities. Investors
have agreed to purchase in the aggregate, and before deduction
of certain fees and expenses of the offering, $5,150,000 of
securities, $2,575,000 of which were purchased at the first
closing and $2,575,000 of which will be purchased upon
effectiveness of a registration statement to be filed by the
company with regard to shares underlying the securities. Midtown
Partners & Co., LLC, acted as the placement agent for the
private placement. |
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At the first
closing, Guardian issued an aggregate of $2,575,000 in principal
amount of Series A 10% senior convertible debentures due
November 7, 2008, and warrants to purchase 4,453,707 shares of
its common stock at an exercise price of $1.15634 per share. The
debentures are convertible into shares of Guardian common stock
at any time at a conversion price of $1.15634 per share. The
debentures bear interest at 10% per annum due on the first day
of each calendar quarter or upon conversion or redemption of the
debentures as to the principal amount so converted or redeemed.
The company may, subject to certain conditions, pay the interest
due under the debentures in registered shares of its common
stock. Also, Guardian may, under certain conditions, require
holders to convert the debentures. The debentures to be issued
to investors at the second closing will be on the same terms as
the debentures issued in the first closing. One half of the
warrants are exercisable commencing on the issue date and the
remaining one half of the warrants become exercisable upon the
receipt by the company of proceeds from the second closing. The
warrants are exercisable for a period of five years. The
debentures and warrants contain certain anti-dilution
provisions, including a provision which provides that if
Guardian fails to satisfy certain revenue and other milestones
established by the purchasers during the six, twelve and
eighteen month periods following the first closing, the
conversion price of the debentures and exercise price of the
warrants will be reset to a price as of the end of the
applicable milestone period, and other customary provisions and
the warrants contain certain cashless exercise provisions. The
securities were offered to accredited investors in reliance on
an exemption from the registration requirements of the
Securities Act of 1933. The securities, including certain
securities issued to Midtown, were not registered under the
Securities Act of 1933 or any state laws and may not be offered
or sold in the United States absent registration or an
applicable exemption from registration requirements.
In connection with the financing, Guardian agreed to file a
registration statement with the Securities and Exchange
Commission covering the resale of the shares of common stock
issuable upon conversion of, and as payment of interest under,
the debentures and the shares of common stock underlying the
warrants.
As compensation to Midtown for its services as placement agent
in the offering, Guardian issued placement agent’s warrants to
purchase an aggregate of 623,519 shares of common stock, and
paid commissions, a non-accountable expense reimbursement and
legal fees to Midtown in the aggregate amount of approximately
$220,250 of which $10,000 was advanced prior to closing. The
placement agent’s warrants are exercisable at a price of
$1.15634 per share for a period of five years from the date they
become exercisable, are on substantially the same terms,
including certain limitations as to exercisability, as the
warrants issued to investors, contain a piggyback registration
right, and a cashless exercise provision during the term of the
warrants.
Bill Donovan, President and COO of Guardian commented, “Proceeds
from this financing will be used to expand business development
activities for our threat detection technology, PinPoint™; to
continue the research and development of an automated mobile
military application for the remote detection of improvised
explosive devices; for continued investment in the development
of sophisticated image clarification, tissue characterization,
and computer-aided detection technologies for medical
applications, to repay a portion of the bridge loan made to us
by our CEO, and for working capital purposes. Although there can
be no assurance, following the second closing of the financing,
we expect to be in a financial position that will allow us to
fund certain strategic growth initiatives that would position
Guardian to be cash self-sufficient.”
About Guardian
Guardian Technologies International, Inc. (OTCBB: GDTI) is a
pioneer in the development of new imaging techniques and
applications. Guardian works to create new, innovative imaging
technologies that result in the detection of threats and earlier
detection of diseases, revolutionizing imaging processes and
developing life-saving solutions.
For additional information, visit www.guardiantechintl.com
About Midtown Partners & Co., LLC
Originally founded in May 2000, Midtown Partners & Co., LLC is
an investment bank focused on private placement investment
banking opportunities. The investment banking group at Midtown
Partners & Co., LLC was founded on the premise that client
relationships and industry focus are keys to the success of
emerging growth companies. Such companies require investment
banking services from a firm with a unique understanding of the
marketplace and the nature of these transactions. Additional
information can be found at http://www.midtownpartners.com.
Forward Looking Statements: This news release contains
forward-looking statements that involve risks and uncertainties.
Forward-looking statements in this document and those made from
time to time by Guardian through its senior management are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
reflect the Company's current views with respect to the future
events or financial performance discussed in this release, based
on management's beliefs and assumptions and information
currently available. When used, the words "believe",
"anticipate", "estimate", "project", "should", "expect", "plan",
"assume" and similar expressions that do not relate solely to
historical matters identify forward-looking statements.
Forward-looking statements concerning future plans or results
are necessarily only estimates and actual results could differ
materially from expectations. Certain factors that could cause
or contribute to such differences include, among other things,
in particular, the size and timing of contract awards,
performance on contracts, performance of acquired companies,
availability and cost of key components, unanticipated results
from audits of the financial results of the Company and acquired
companies, changing interpretations of generally accepted
accounting principles, outcomes of government reviews,
developments with respect to litigation to which we are a party,
potential fluctuations in quarterly results, dependence on large
contracts and a limited number of customers, lengthy sales and
implementation cycles, market acceptance of new or enhanced
products and services, proprietary technology and changing
competitive conditions, system performance, management of
growth, dependence on key personnel, ability to obtain project
financing, general economic and political conditions and other
factors affecting spending by customers, the unpredictable
nature of working with government agencies and other risks,
uncertainties and factors including those described from time to
time in Guardian's filings with the Securities and Exchange
Commission, including without limitation, Guardian's Form 10-K
for the year ended December 31, 2005, and its quarterly reports
on Forms 10-Q for the quarters ended March 31 and June 30, 2006.
Guardian expressly disclaims any obligation to update any
forward-looking statement. |
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