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Force Protection announces $15.8 million equity investment
Jan. 1, 2005Swamp Fox
The agreement is one of several steps by the company aimed at building on recent rapid growth fueled by military operations in Iraq and Afghanistan. Company executives also announced that all outstanding Series B and C Preferred Shares will be converted into common stock.
"This financing will provide us with the necessary working capital to support our operations, and it will allow us to take advantage of the substantial growth opportunities present in our key business segments," said Force Protection Vice President and Chief Financial Officer Tom Thebes.
"Additionally, with the completion of a pending reverse 12-for-1 split, the conversion of all previously existing outstanding preferred shares into common stock, and the elimination of anti-dilution provisions for all legacy shareholders, we have put the Company's capital structure in a form that will more readily lead to significant interest from both institutional investors and analysts," Thebes said. "Force Protection expects to file for a listing on a national exchange during the first calendar quarter of 2005."
Atlanta-based HPC Capital Management Corporation acted as the placement agent. The lead investor was the Palisades Master Fund. Under the terms of the financing, the preferred is convertible into common stock of Force Protection at $.32 per share, subject to adjustment based upon a market average price over 60 days.
"We not only believe strongly in the business case for Force Protection, but it is rewarding to know that the vehicles they produce are saving the lives of our troops in Iraq," said HPC Capital Chairman Andy Reckles. "As an additional show of support for them, HPC Capital will donate $10,000 to the Disabled American Veterans charitable organization for American's who have become disabled in combat."
"We are pleased with this investment led by Palisades Master Fund," said Force Protection Chairman Frank Kavanaugh. "This is an important step for the company's future. With this additional strength in our balance sheet we can now focus on securing a competitive senior term debt line. We appreciate and have been particularly impressed by the efficient and cooperative manner with which Palisades has managed this transaction."
In addition to the financing agreement, Force Protection announced today that R. Scott Ervin has been named interim Chief Executive Officer. Ervin, a current member of the board and a corporate attorney, will replace Gale Aguilar, who will step down to focus on his position as president and chief operating officer of Mitem, a Menlo Park, California enterprise software company. Aguilar will remain a member of the Force Protection board of directors.
Ervin is a corporate lawyer with more than 20 years' business experience and an extensive background in corporate governance. He is licensed to practice law in New York and Texas, and is admitted to practice before the Second U.S. Circuit Court of Appeals and the United States Supreme Court. Ervin has also served as a director of Force Protection for over 3 years.
"We would like to thank Gale for his excellent work at Force Protection." said Kavanaugh. "He has overseen the transition of the company into a fast growing manufacturer of blast-protected vehicles which are now deployed with U.S. forces in Iraq and Afghanistan. During his tenure, he has recapitalized the company and assisted in the securing of $22 million in new orders for 2005, including delivery of the first Cougar vehicles to Iraq."
About Force Protection, Inc.
Force Protection, Inc. manufactures ballistic and mine protected vehicles through its wholly owned subsidiary. These specialty vehicles are protected against landmines, hostile fire, and Improvised Explosive Devices (IEDs, commonly referred to as roadside bombs). Force Protection's mine and ballistic protection technology is among the most advanced in the world. The vehicles are manufactured outside Charleston, S.C.
For more information about Force Protection, Inc., please visit www.forceprotectioninc.com.
This press release contains forward-looking statements that are based on management's current expectations, estimates, and projections. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Many factors, including those discussed more fully elsewhere in this release and in the Company's filings with the Securities and Exchange Commission, (www.sec.gov) particularly its latest annual report on Form 10-K, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to, risks of dependence on government and failure to obtain new government contracts, inherent risks of government contracts, risks of supply interruptions to Vehicle Systems segment, risks of fixed-price contracts, risks as to cost controls, risks of general economic conditions, risks industry economic conditions, risks as to licenses, risk of competition, risks relating to technology, risks as to terrorist attacks on the U.S. and their impact on the U.S. economy, risks relating to personnel, risks of claims and litigation, risks of product defects, risks of no credit facility, risks as to foreign sales and global trade matters, risks as to information technology, risks as to acquisitions and restructuring activities, risks as to currency fluctuations, risks as to environmental and safety matters, and credit risks all as more specifically outlined in the Company's latest annual report on Form 10-K. In addition, such forward-looking statements could be affected by general industry and market conditions and growth rates, general domestic and international conditions including interest rates, inflation and currency exchange rates and other future factors. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.