Message #1 From:
Stock News Bot Date: July 15, 2005 12:00:00 AM
TRIN News Trinsic Announces Exchange of Standby Credit Facility Debt and Purchase of Additional Equity
TAMPA, Fla.--(BUSINESS WIRE)--July 15, 2005--Trinsic, Inc. (NASDAQ/SC: TRIN) announced today that it has entered into an agreement with The 1818 Fund III, L.P. (the "Fund"), Trinsic's largest stockholder, to exchange all outstanding indebtedness (approximately $21.5 million as of today) under Trinsic's Standby Credit Facility for an equivalent liquidation preference of Series H Preferred Stock. The Fund will also purchase an additional $2.5 million in liquidation preference of Series H Preferred Stock simultaneously with the exchange, resulting in an aggregate liquidation preference of approximately $24.0 million of Series H Preferred Stock being issued. The exchange and purchase are expected to be consummated today.
The Series H Preferred Stock is mandatorily convertible into common stock upon the later to occur of (a) September 30, 2005 or (b) the approval of the issuance of common stock at the conversion price as contemplated by the Series H Preferred Stock by holders of Trinsic's common stock (or a determination that such approval is not required under the applicable rules of the Nasdaq SmallCap Market). Trinsic expects to hold a special meeting of stockholders for the purpose of approving the issuance of common stock as described above and the reverse stock split described below on or before September 19, 2005.
Following stockholder approval (unless it is not required under applicable rules of the Nasdaq SmallCap Market), the Series H Preferred Stock will automatically convert into shares of Trinsic's common stock at a conversion price equal to $0.39, per share, subject to customary antidilution adjustments; provided, however, that if on or prior to September 29, 2005, the Corporation shall not have entered into a definitive agreement(s) to acquire no less than 150,000 "UNE-P" subscriber lines (tested as of September 29, 2005), then the conversion price shall reduce to $0.20 per share, subject to customary antidilution adjustments. Trinsic noted that it has been engaged in discussions with several telecommunications carriers with a view towards the acquisition of additional subscriber lines in its key markets through purchase, swap or other means. To date, none of these discussions have resulted in specific line acquisition agreements, and Trinsic cannot at this time determine the probability of any such transaction occurring on or before September 29, 2005 or at all.
Initially, the Series H Preferred Stock will not accrue dividends (other than a proportionate share of dividends, if any, declared on Trinsic's common stock). Beginning January 1, 2006, if the Series H Preferred Stock has not previously converted into common stock, the holders of shares of Series H Preferred Stock, in preference to the holders of shares of common stock and of any shares of other junior capital stock, shall be entitled to receive, when, as and if declared, dividends at an annual rate of 12.50%.
Trinsic also said that at the previously mentioned special meeting, stockholders will be asked to approve one or more reverse stock split alternatives in amounts to be determined, to be implemented or abandoned in the discretion of Trinsic's Board of Directors.
