This is the 8-k filed a few weeks ago...hopefully it gives the company some room now to further develop their technology/markets...press release follows. Stock is at .20/.29...do your own due diligence:
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 10, 1999, the Registrant consummated the sale of its
wholly-owned subsidiary EPS Wireless, Inc. ("EPS") pursuant to the terms of a
Share Purchase Agreement dated December 10, 1999 between the Registrant and
Celestica Corporation ("Celestica"). The Share Purchase Agreement provided for
an aggregate cash purchase price of $14.9 million for the shares of EPS,
subject to a holdback of $750,000 to be paid, net of any claims for
indemnification by Celestica under the Share Purchase Agreement, on or about
June 10, 2000. The balance of $14.15 million was paid to or for the benefit of
the Registrant on December 10, 1999, with $4.6 million being paid directly to
the Registrant and $9.55 million being paid directly to certain lenders of the
Registrant on the Registrant's behalf.
Approximately $7.02 million of the proceeds of the sale of EPS were
used to retire the Registrant's term note with Bank of America, N.A. and to
reduce the Registrant's outstanding balance under its revolving credit facility
with Bank of America. Concurrently, Bank of America and the Registrant amended
certain terms and conditions of the revolving credit facility to establish a
$2.0 million facility to be used for working capital purposes that matures
March 2001.
In addition, the Registrant used approximately $2.53 million of the
proceeds from the sale of EPS to repay a portion of the notes under its
equipment credit facility with Glenayre Electronics, Inc. Under the terms of
this repayment, Glenayre amended certain payment terms with respect to the
outstanding balance under the remaining notes to suspend principal payments
until March 2001 (although interest will still be paid), at which time monthly
principal and interest payments will commence and continue until December 2001.
The purchase price and other terms of the sale of EPS to Celestica
were determined by arms-length negotiation of the parties. Celestica is an
independent third party not affiliated with the Registrant. Prior to the sale,
EPS operated as a wholly-owned subsidiary of the Registrant, engaging in the
business of pager and cellular product repair services, product sales and
inventory management and fulfillment.
Preferred Networks, Inc. Reduces Debt; Restructures
Senior Credit Facility And Equipment Credit Facility
ATLANTA, Dec. 13 /PRNewswire/ -- Preferred Networks, Inc. (OTC Bulletin Board: PFNT - news; PNI), a leading
outsourcing services provider to the wireless industry, today reported that it has restructured certain terms and conditions of its
senior credit facility and its primary equipment credit facility.
In connection with the sale of its wholly owned subsidiary, EPS Wireless, Inc. (``EPS'), which PNI also announced today, the
Company received $14.9 million in cash proceeds, less certain holdbacks. Approximately $7.0 million of the proceeds were
used to retire the Company's term note with its senior lender and to reduce the Company's outstanding balance under its senior
revolving credit facility. Concurrently, the senior lender amended certain terms and conditions of the Company's revolving credit
facility to establish a $2 million facility to be used for working capital purposes that matures March 2001.
In addition, the Company used approximately $2.5 million of the proceeds from the sale of EPS to repay a portion of its notes
under its primary equipment credit facility. Under the terms of this repayment, the equipment lender amended certain payment
terms with respect to the outstanding balance under the remaining notes to suspend principal payments until March 2001
(although interest will still be paid), at which time monthly principal and interest payments will commence and continue until
December 2001.
The remaining proceeds from the transaction, net of expenses, will be used for working capital purposes by the Company.
Commenting on the restructuring of these credit facilities, Chairman and Chief Executive Officer, Mark H. Dunaway said, ``The
proceeds from this transaction have enabled us to significantly strengthen our balance sheet, reducing our total outstanding debt
by approximately 60% and providing working capital funding for our future. In addition, we are particularly pleased with the
support we have received from our senior lender in providing growth financing for PNI under a new working capital facility.'
Preferred Networks, Inc., headquartered in metropolitan Atlanta, provides outsourcing solutions to the wireless industry, which
allow companies to offer branded wireless services directly to subscribers, while relying on PNI to provide high-quality
network services and technology gateway products. PNI offers its services through its PNI Access Services Division(SM).
PNI's address on the World Wide Web is: pni.net .
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: The statements contained in this release
which are not historical facts, such as those concerning future financial performance and growth, are forward-looking
statements that are subject to risks and uncertainties, including those identified in the Company's 1998 Annual Report on Form
10-K and Quarterly 10-Q filings, and actual results could differ materially from those anticipated in the forwarding-looking
statements. In particular, statements relating to the competitive position and performance of Platform1(TM) and iTerminal(TM)
and their expected performance in the market place are forward-looking statements that are subject to risks and uncertainties.
The Company operates in a highly competitive marketplace and new product developments by competitors can occur at any
time, thereby diminishing the attractiveness of the Company's products. Also, there can be no assurance that the marketplace
will find the price and functionality of the Company's products attractive, which also can adversely affect product sales. |
