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Tri-S gets tenders for 86% of 10% convertibles in exchange offer
By Jennifer Chiou
New York, Nov. 14 - Tri-S Security Corp. said it received tenders from holders of $6.59 million, or about 86%, of its $7.67 million of 10% convertible promissory notes due Oct. 14, 2008 in the exchange offer for the notes.
The offer expired at 5 p.m. ET on Nov. 13, pushed back from Nov. 5 and Oct. 31. It was originally set to end on Sept. 18.
As a result of the exchange, the company said it will issue an equal amount of new 14% convertible promissory notes and warrants to purchase 686,490 shares of common stock. The new notes are convertible, and the series A warrants are exercisable into shares of common stock at a conversion price of $1.75 per share and an exercise price of $0.66 per share, respectively.
The company had announced new terms on Oct. 20 in its exchange offer for the convertibles, eliminating the option to receive the series A warrants for the existing notes, which it later amended.
It also had amended the new convertible promissory notes on offer, raising the coupon to 14% from 10%, shortening the term to two years from three years and cutting the conversion price to $1.75 per share from $3.30 per share.
Tri-S also reduced the exercise price of the warrants that are being offered with the new notes to the volume-weighted average price of its common stock for a five-day period prior to the expiration of the exchange. Previously the exercise price was $3.30.
Warrant coverage was cut to 18.23% from 50%.
Tri-S previously reduced the threshold for completing the exchange, requiring that 85% of the existing notes be tendered, down from 95%.
Based in Alpharetta, Ga., Tri-S provides contract security guard services to U.S. government agencies.
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