World Wireless Communications, Inc. Announces Freeze of Assets of Its Major Stockholder Group
GREENWOOD VILLAGE, Colo., July 16 /PRNewswire-FirstCall/ -- World Wireless Communications, Inc. (Amex: XWC), a developer of wireless and Internet based telemetry systems, announced a development affecting its largest stockholder group and its two senior creditors. The Company learned that a Federal judge in South Florida entered a temporary restraining order on July 10, 2003 against the Connecticut-based advisors of a purported large hedge fund (including Michael Lauer) which (i) restrains them from violating the anti-trust provisions of the Federal securities laws, (ii) freezes the assets of Lancer Offshore, Inc. (and certain other affiliated entities) until a hearing on July 18, 2003 and (iii) appoints Marty Steinberg, Esq., an attorney in the law firm of Hunton & Williams, LLP as receiver for Lancer Offshore, Inc., and several other entities, for marshaling and safeguarding their assets. Such action does not affect the Company directly.
Lancer Offshore, Inc. and Lancer Partners, L.P. (which previously filed a bankruptcy proceeding in the Federal courts in 2003), together with The Orbiter Fund Ltd., comprise our largest stockholder group and currently own 7,295,853 issued and outstanding shares of our common stock out of 31,459,945 shares issued and outstanding at March 31, 2003, plus warrants to purchase 2,500,000 shares of the Company's common stock at $0.20 per share, or 28.8%, exclusive of warrants to purchase an aggregate of 1,010,000 shares as of such date. Mr. Lauer is believed to control the voting and disposition of these shares by virtue of his being the investment manager of these entities, is also the general partner of Lancer Partners, L.P. and is treated as the beneficial owner of these shares. This group has no representation on the Board of Directors of the Company and plays no active vote in the management of the Company.
Lancer Offshore, Inc. and Lancer Partners, L.P. also are the Company's senior secured creditors based on their aggregate secured loans to the Company totaling $7,020,000 in principal amount outstanding as of the date hereof.
In addition, such stockholder and his affiliates potentially could increase their ownership in the Company significantly. For further details concerning the Lancer group's stock ownership and the senior secured financing, see the Company's Form 10-K for the year ended December 31, 2002 which was filed with the SEC in May, 2003 (although it was not audited or reviewed by any independent accountants).
The Company attempted to reduce its reliance on its largest stockholder group and secured creditors by entering into a Restructuring Agreement with Lancer Offshore, Inc. and Lancer Partners, L.P. in February, 2003, subject to the condition precedent that the Company receive an equity investment of at least $750,000. The key terms of such agreement are set forth below:
(a) The Company would pay such creditors $1,400,000 for $2,400,000
principal amount of the senior secured notes (the "2001 Notes"),
which would result in the elimination of $1,000,000 of indebtedness
and leave an outstanding principal amount of $4,620,000 (which,
because of the change in conversion rate thereof below, would be
convertible into a maximum of 9,240,000 shares of common stock).
(b) The Company would pay such creditors the sum of $100,000 in full
payment of all interest accrued on the 2001 Notes to date (which is
in excess of $1,600,000).
(c) The maturity date of the 2001 Notes would be extended from
May 29, 2003 until June 30, 2005.
(d) The 2001 Notes would carry no further interest thereon in the
future.
(e) The 2001 Notes held by such creditors would become mandatorily
convertible at the rate of one share for each $0.50 of debt, instead
of the current rate of one share for each $0.05 of debt. Such
mandatory conversion of the 2001 Notes would occur upon (i) the
approval of such mandatory conversion by the Company's shareholders
at a meeting of shareholders (which was given up to the then
applicable ceiling amount of $5,000,000 but not for any excess
thereof), and (ii) the Company's receipt of equity in an amount
equal to the then outstanding principal balance of the 2001 Notes
from persons other than Michael Lauer and his affiliates, including,
without limitation, Lancer Offshore, Inc., Lancer Partners L.P. and
The Orbiter Fund Ltd., on or before June 30, 2005 (instead of the
current date of July 1, 2003).
The Company is seeking financing, although the results of such efforts are not assured, which financing is necessary to consummate the previously reported conditional restructuring agreement with the Company's senior secured creditors.
About World Wireless Communications, Inc.
Greenwood Village-based World Wireless Communications, Inc. was founded in 1995 and is a developer of wireless and Internet systems, technology and products. World Wireless focuses on spectrum radios in the 900MHz band and has developed the X-traWeb(TM) system -- an Internet based product designed for remote monitoring and control devices. X-traWeb's many applications included utility meters, security systems, vending machines, asset management, and quick service restaurants.
Statements made in this press release, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties.
Such forward-looking statements are made based on management's belief as well as the assumptions made by, and information currently available to, management pursuant to the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995.
SOURCE World Wireless Communications, Inc.
CO: World Wireless Communications, Inc.; Hunton & Williams, LLP; Lancer Offshore, Inc.; Lancer Partners, L.P.; The Orbiter Fund Ltd.; Orbiter Fund Ltd.
ST: Colorado, Florida
SU: LAW
prnewswire.com
07/16/2003 18:29 EDT |
