GVI Security Solutions, Inc. Raises Capital, Announces Changes to the Board
CARROLLTON, Texas--(BUSINESS WIRE)--GVI Security Solutions, Inc. (OTCBB:GVIS), a leading provider of video security solutions featuring the complete Samsung Electronics line of products, today announced the private placement of $4.75 million of its securities and changes to its board of directors.
The purchasers in the private placement consisted of a group of accredited investors led by GVI Investment Company, LLC, a Nevada limited liability company formed for the purpose of participating in the private placement. GVI Investment Company, LLC, which purchased $2.5 million of securities in the private placement, is managed by David Weiner, who has been appointed to GVI’s Board of Directors.
A substantial portion of the proceeds have been used to pay amounts previously owing to Samsung, and the remaining proceeds will be used primarily for working capital and general corporate purposes.
The securities sold in the offering consisted of Common Stock at a price of $.004 per share and 6% Convertible Promissory Notes convertible into Common Stock at a conversion price of $.004 per share. Upon the anticipated final closing of an additional $250,000 investment, the Company will have issued 125,000,000 shares of Common Stock and $4,500,000 of Convertible Notes convertible into 1,125,000,000 shares of Common Stock. Assuming the full conversion of the Convertible Notes, the investors in the private placement own approximately 96% of GVI’s Common Stock, with GVI Investment Company owning approximately 48% of the Common Stock. GVI expects to effect a 50-for-1 reverse stock split so that it will have sufficient authorized shares of Common Stock to permit the conversion of the Convertible Notes.
“We believe that our relationship with Samsung Electronics is strong, and that we are now well positioned to substantially grow our business together with them,” said CEO Steve Walin.
“This funding will facilitate the completion of GVI’s turnaround and will permit us to further focus on strengthening our core business,” said CFO Joe Restivo.
In connection with the closing of the private placement, the Company’s directors other than Steve Walin resigned from GVI’s Board, and David Weiner, Craig Ellin, Gary Freeman, Moshe Zarmi and Joseph Restivo, GVI’s Chief Financial Officer, were appointed to fill the resulting vacancies.
David Weiner is the President of W-Net, Inc., an investment and consulting firm he founded in 1998. From December 2002 to April 2003 Mr. Weiner was Co-President for Trestle Holding Inc., a provider of digital imaging and telemedicine products. In 1993, Mr. Weiner joined K-tel, a music retailer, as Vice President of Corporate Development. He advanced to the position of President in 1996, which he held until he left to form W-Net in 1998.
Gary Freeman is currently a Partner in Bandari, Beach, Lim & Cleland’s Audit and Accounting services division. In conjunction with various consulting engagements, Mr. Freeman has assumed interim senior level management roles at numerous public and private companies during his career, including as Co-President and Chief Financial Officer of Trestle Holdings Inc., Chief Financial Officer of Silvergraph International and Chief Financial Officer of Galorath Incorporated. Mr. Freeman is currently a member of the Board of Directors of Blue Holdings and serves as its Audit Committee Chairman. Mr. Freeman’s previous experience includes ten years with BDO Seidman, LLP, including two years as an Audit Partner.
Craig Ellins is the founder and Chief Executive Officer of hello Network, Inc. a Java technology development company. Mr. Ellins has more than 20 years of experience in television direct marketing and Internet communications and has provided strategic planning services to companies such as, K-tel International, Fingerhut Corporation, Guthy-Renker, Simitar Entertainment, and Stamina Products.
Moshe Zarmi has 30 years experience, primarily in high technology industries. From February 1993 to January 1997, Mr. Zarmi was the Chief Executive Officer of Geotest, a leading Automated Test Equipment company based in Southern California. His extensive business experience includes a tenure at Israel Aircraft Industries, where he held various positions in finance and administration, as well as head of US marketing and sales.
About GVI Security Solutions, Inc.
GVI Security Solutions Inc. is a leading provider of video surveillance security solutions to the homeland security, institutional and commercial market segments.
Forward-Looking Statements:
Some of the statements made by GVI Security Solutions, Inc. in this press release are forward-looking in nature. Forward-looking statements in this press release are not promises or guarantees and are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. These statements are based on management's current expectations and assumptions and are naturally subject to uncertainty and changes in circumstances. We caution you not to place undue reliance upon any such forward-looking statements. Actual results may differ materially from those expressed or implied by the statements herein. GVI Security Solutions, Inc. believes that its primary risk factors include, but are not limited to: reliance on primary supplier; effective integration of recently acquired operations and personnel; expansion risks; effective internal processes and systems; the ability to attract and retain high quality employees; changes in the overall economy; rapid change in technology; the number and size of competitors in its markets; outstanding indebtedness; law and regulatory policy; the mix of products and services offered in the company's target markets; and other factors detailed in the Company's filings with the Securities and Exchange Commission, including the Annual Report on Form 10-KSB for the year ended December 31, 2005 currently on file, as well as the risk that projected business opportunities will fail to materialize or will be delayed.
