Message #27 From:
NewsBot Date: November 8, 2006 01:31:00 PM
GDTI News Guardian Technologies International, Inc. Announces First Closing of Financing
HERNDON, Va.--(BUSINESS WIRE)--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.
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.
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.
