Xfone Announces Rights Offering
06 Julho 2011 - 5:05PM
Business Wire
Xfone, Inc. (NYSE Amex and TASE: XFN) (“Xfone” or “the
Company”) announces that its Board of Directors has approved
a direct rights offering (the “Rights Offering”) in
which Company stockholders will receive non-transferable and
non-tradable rights to purchase one (1) additional share of the
Company’s common stock, par value $0.001 for each share owned as of
the record date, for a subscription price of $0.30 per share (each,
a “Right”). The Company will set the record date in accordance with
NYSE Amex LLC guidelines and in conjunction with the date of
effectiveness of the registration statement under the Securities
Act of 1933, as amended, relating to the Rights Offering (the
“Registration Statement”) that the Company will file with the U.S.
Securities and Exchange Commission (the “SEC”). The Company
estimates that it will raise approximately $5 million in the Rights
Offering.
Xfone stockholders who exercise their Rights in full may also
exercise an over-subscription privilege to purchase, on a pro rata
basis, a portion of the unsubscribed shares, at the same price of
$0.30 per share, subject to certain limitations. Each subscribing
stockholder will also have a “step-up privilege” allowing such
stockholder to subscribe for one (1) additional share of common
stock in lieu of any fractional share that would have been granted
in the Rights Offering.
In conjunction with the Rights Offering, the Company will amend
and/or adjust the terms of current warrants and options and/or
issue additional warrants and options to provide the holders of
such warrants and options with equal fair value after the Rights
Offering as they had prior to the Rights Offering.
The Rights Offering is expected to commence after the
Registration Statement has been filed and declared effective by the
SEC. The offering period is expected to be set at no less than 14
days and no more than 30 days, subject to extension.
Due to the “dual listing” of the Company's shares of common
stock on the Tel Aviv Stock Exchange Ltd. (the “TASE”), the Rights
Offering is subject, among others, to the approval of the Israel
Securities Authority and the TASE.
There can be no assurance that the Rights Offering will be
successful. The Company reserves the right to change the terms of
the Rights Offering (including the Subscription Price) or abandon
the Rights Offering at any time prior to its consummation.
Guy Nissenson, President and CEO of Xfone stated, “As part of
the federal stimulus package, Xfone was selected to receive
approximately $100 million in grants and low cost loans to build
out its transformative Pride Network projects. This funding must
exclusively be used for capital expenditure to build the network
and cannot be applied to operating expenses such as sales and
marketing or other working capital needs. In order to drive
enhanced returns to our shareholders over the long term, we must
have adequate working capital to support our operating expenses so
we can maximize market penetration once the towns are built out,
similar to what we are doing in Levelland.”
Mr. Nissenson continued, “We have evaluated various options to
alleviate the Company’s current working capital deficit, including
another bond offering in Israel which is not feasible at the
moment, in part due to the softening of the bond market in that
country. At this juncture, we believe that a rights offering is the
best course of action for existing shareholders, providing them
with the opportunity to maintain their percentage ownership of the
Company and participate in our expected future success.”
Institutional Marketing Services (IMS) is the Information Agent
for the Rights Offering. Stockholders may direct questions
regarding the Rights Offering to Institutional Marketing Services
at (203) 972-9200, 51 Locust Avenue, Ste 204, New Canaan,
Connecticut 06840.
A registration statement relating to the foregoing securities
has not yet been filed with or declared effective by the SEC. The
securities may not be sold nor may offers to buy be accepted prior
to the time a registration statement becomes effective. This
announcement shall not constitute an offer to sell, or the
solicitation of an offer to buy the rights or the underlying
shares, nor shall there be any sale of these securities in any
state in which such offer, solicitation or sale would be unlawful
prior to the registration or qualification under the securities
laws of any such state.
About Xfone, Inc.
Xfone is a provider of high speed broadband services,
including Internet access, digital cable TV programming and
local and long distance telephone service to residential and
business customers in northern Texas and southeastern Louisiana.
Xfone's Fiber-To-The-Premise (FTTP) network provides one of the
fastest internet connections available. The Company currently has
operations in Texas, Mississippi and Louisiana and also serves
customers in Arizona, Colorado, Kansas, New Mexico and Oklahoma.
For the Company's website, please visit: www.xfone.com.
This press release contains forward-looking statements. The
words or phrases "would be," "will allow," "intends to," "will
likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project," or similar expressions are
intended to identify "forward-looking statements." Xfone's
financial and operational results reflected above should not be
construed by any means as representative of the current or future
value of its common stock or bonds. All information set forth in
this press release, except historical and factual information,
represents forward-looking statements. This includes all statements
about the Company's plans, beliefs, estimates and expectations.
These statements are based on current estimates and projections,
which involve certain risks and uncertainties that could cause
actual results to differ materially from those in the
forward-looking statements. These risks and uncertainties include
issues related to: rapidly changing technology and evolving
standards in the industries in which the Company and its
subsidiaries operate; the ability to obtain sufficient funding to
continue operations, maintain adequate cash flow, profitably
exploit new business, license and sign new agreements; the
unpredictable nature of consumer preferences; and other factors set
forth in the Company's most recently filed annual report and
registration statement. Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect
management's analysis only as of the date hereof. The Company
undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the
date hereof. Readers should carefully review the risks and
uncertainties described in other documents that the Company files
from time to time with the U.S. Securities and Exchange
Commission.
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