LCC International Reaches Settlement Agreement on Obligations to Private Placement Stockholders
For Immediate Release
January 03, 2008
Agreement Alleviates LCC's Obligation to Pay Escalating Cash
Penalties for Late Stock Registration and Filings
MCLEAN, Va.--(BUSINESS WIRE)--Jan. 3, 2008--LCC International,
Inc. (NASDAQ:LCCI) today announced that it has reached an agreement
with those stockholders that participated in the Company's April 2007
$17M private placement of securities, which covers the Company's
obligation to register shares issued in the offering. Under the terms
of the original agreement, LCC was obligated to register the shares
issued in the offering to the participating shareholders by defined
dates or be subject to cash penalty payments. Due to the delay in
filing its 2006 Form 10-K and subsequent 2007 Quarterly Form 10-Q's,
the Company has not been in compliance with its filings and as a
result, has not been able to register the shares and meet these
obligations. Specifically, the agreement called for a cash penalty of
1% per month, up to 10%, beyond June 3, 2007 until a registration
statement was filed for the investors' shares and an additional cash
penalty of 1% per month beyond August 20, 2007 until the registration
statement is declared effective to a maximum of 10% penalty in each of
these two areas.
On December 27, 2007, the Company reached an agreement with its
private placement shareholders which alleviated the Company's
obligation to pay the penalties in cash which would have amounted to a
maximum of $3.4 million. Under the new agreement, the Company will
exchange each share of the class A common stock (issued at $3.35 per
share) for 1.125 shares of a new series of preferred stock. These
preferred shares will convert back to common stock upon the Company's
next qualifying equity raise of $10 million or more, or at the end of
18 months. The conversion will be at the sale price in the qualifying
equity raise (or the market price of the common stock, if conversion
is after the 18 months) but not below a floor price of $2.00 per
share. In return, the investors have agreed not to engage in short
selling or other hedging activities involving LCC stock until the
earlier of 6 months following the time the Company becomes compliant
with its SEC filing obligations or the consummation of a qualified
equity financing. Following that time, the prohibition on hedging
activities will be in effect when LCC informs the investors that it is
involved in qualified equity financing activities. In addition, the
investors agreed to release the Company from all accrued or future
penalties regarding any outstanding issuance or registration
requirements or continuing non-compliance penalties.
"I am pleased we were able to reach a settlement of this
outstanding obligation. This settlement allows us to put this cash
obligation behind us," said Dean Douglas, LCC President and Chief
Executive Officer. "We continue to work diligently with our auditors
to get all of our outstanding quarterly reports filed so that we can
be in compliance with the SEC and begin the process to register the
shares of these investors. Our focus continues to be the execution of
our business plan and to create greater shareholder value."
About LCC International, Inc.
LCC International is the recognized leader in providing wireless
voice and data turn-key services to the telecommunications industry.
The Company's service offering includes network services, business
consulting, tools-based solutions; and training through its
world-renowned Wireless Institute. The Company has worked with all
major access technologies (including UMTS, EV-DO, HSDPA and WiMAX) and
has participated in the success of some of the most sophisticated
wireless systems in the world. LCC is unique in its ability to provide
comprehensive turnkey services to wireless operators around the world.
The Company brings local knowledge and global capabilities to its
customers, offering innovative solutions, insight into cutting-edge
developments and delivering solutions that increase business
efficiencies. News and additional information are available at
www.lcc.com
Cautionary Note regarding forward-looking statements under the
Private Securities Litigation Reform Act of 1995:
Information in this release regarding LCC's expectations, beliefs,
and intentions are forward-looking statements that involve risks and
uncertainties. All forward-looking statements included in this release
are based upon information available to LCC as of the date of this
release, which may change, and LCC assumes no obligation to update any
such forward-looking statement. These statements are not guarantees.
Factors that could cause or contribute to differences from such
expectations include, but are not limited to risks associated with
international operations, challenges and costs arising from
integration of new operations and other factors that may affect our
business are discussed in LCC's filings with the Securities and
Exchange Commission, including our most recent annual report on Form
10-K and our quarterly reports on Form 10-Q.
CONTACT: LCC
Nancy Feeney
Director of Marketing Communications
and External Relations
+1 703-873-2077
Nancy_feeney@lcc.com
SOURCE: LCC International, Inc.
