ARLINGTON, Va., Oct 07, 2005 /PRNewswire-FirstCall via COMTEX/ -- Celerity Systems, Inc. (OTC Bulletin Board: CESY) announced today that it has closed on its previously announced $1.0 million Preferred Stock financing with Cornell Capital Partners.
Celerity CEO C. Thomas McMillen said, "We are pleased to have successfully closed this first step of our financing and we look forward to closing the second $50 million part upon the termination of the company's status as a business development company. These financings will enable us to pursue our new strategic direction: to focus on owning and operating small and mid-sized growth businesses that provide homeland security solutions through innovative technologies to both the public and private sector and to drive growth through management, strategic guidance, capital and financial support, and government marketing expertise."
Under the terms of the financing, the Redeemable Convertible Series F Preferred becomes convertible into common stock if the company's status as a business development company is terminated. The conversion price will be equal to $0.001 per share but such conversion right is limited to ownership of not greater than 4.99% of the outstanding common stock of the company.
The material terms of the Series F Preferred Stock sale will be filed via form 8-K with the Securities and Exchange Commission and will be available at the SEC's website at http://www.sec.gov.
For the election of the two Common Stock Director-Nominees that the Board has recommended by the Common Stockholders, and For the election of the two Preferred Stock Director-Nominees that the Board has recommended by the Series F Preferred Stockholders;
• For the approval of an amendment to the Company’s Certificate of Incorporation to change the name of the Company to “Homeland Security Capital Corporation”;
• For the approval of an amendment the Company’s Certificate of Incorporation to increase the number of authorized shares of Common Stock from 5,000,000,000 to 20,000,000,000;
• For the approval of the adoption of the Celerity Systems, Inc. 2005 Stock Option, Restricted Stock and Stock Appreciation Rights Plan; and
• For the approval to withdraw of the Company’s election as a BDC under Section 54 of the ICA.
With respect to any other matter that properly comes before the Meeting, the proxy holders will vote as recommended by the Board or, if no recommendation is given, in their own discretion.
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• The ability to raise capital for the Company in an efficient manner, and without the necessity of having special stockholders meetings, by issuing common stock, which would in-turn provide the Company with additional working capital for general corporate purposes and to pursue acquisitions and other business opportunities.
• Having shares available to issue in connection with the pursuit of business expansion opportunities as well as future acquisitions.
• Having shares to issue to employees, officers, Directors and services providers and issuing them shares in exchange for services and as a form of incentive compensation.
The disadvantages include the following: • Dilution to the existing stockholders of the Company, including a decrease in the Company’s net income per share in future periods, which in-turn could cause the market price of the Common Stock to decline.
• Provoking short-selling of the Common Stock, which would put downward pressure on the market price thereof.
• Increasing the supply of shares of Common Stock, which, without a corresponding increase in demand, could cause the market price of the Common Stock to decline.
• Potential change of control if all or a significant block of the shares of the Common Stock to be issued are held by one or more stockholders working together to effect such a change.
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The disadvantages include the following: • Dilution to the existing stockholders of the Company, including a decrease in the Company’s net income per share in future periods, which in-turn could cause the market price of the Common Stock to decline
----------------------------------------------- Them: Hey, shareholders. Were going to put Kool-aid in your gas tank. You have no say so. Trust us. Me: Umm...I don't think so.
I thought this new CEO was a brilliant guy. I'm starting to think there is know way HISC would have done this.
Q: once all these shares are out, how do you ever get them back w/o killing the pps?
-------------------- speak from your heart, invest from experience... Posts: 261 | From: Dallas | Registered: May 2005
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I'm doing the exact same thing. Wow. I'm looking for the 0.0008-0.0010 range before I start grabbing chunks. Unfortunately I'm initially in at 23 so my average will be higher. Here's to a gamble worth the wait! C'mon Oct 2006.
-------------------- speak from your heart, invest from experience... Posts: 261 | From: Dallas | Registered: May 2005
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Personally, adding more shares to the market will only enable them to purchase other companies and products. I am not worried as the CEO is a powerhouse when it comes to Homeland Security.
Posts: 1254 | Registered: Aug 2005
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A/S does not equal to O/S! I seriously doubt that Cornell would be part of the doomsday dilution scenario as discussed....
Posts: 60 | From: Grungteb | Registered: Sep 2005
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Yesterday, Iw as expecting a major selloff, however that did not occur. Indicates the inetrest in this stock.
Good luck to all, I figure even if the shares are increased, and he actually uses those shares to buy companies. It would be like having ten companies with 2 Billion shares each. Add the value of each it should be higher than .002
As we all have stated the CEO knows what he is doing, so I am risking this gamble.
What I do like is that the PR of the A/S was announced, not like other companies where a increased is executed and it was a surprised to all of us. Tell me the thruth and keep me inform.
CESY is a gamble big gamble, and I am willing to stay the course. I won't sell until 2007. I'm risking 4 Grand and we will see in 2007. (That's 5% of my HISC profits)
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Celerity Announces New Nominees for Board of Directors
ARLINGTON, Va., Oct 11, 2005 /PRNewswire-FirstCall via COMTEX/ -- Celerity Systems, Inc. (OTC Bulletin Board: CESY:) today announced nominations for election of additional members to its board of directors. The three new proposed members are as follows:
Zev Kaplan (a Preferred Stock Director-Nominee), age 53, is the founder of a law firm concentrating its practice in the areas of transportation, infrastructure, government relations, business and administrative law. Mr. Kaplan is currently General Counsel to Cash Systems Inc., a publicly traded company in the financial services business, a position he has held since March 2005. From April 1995 to the present, Mr. Kaplan has been General Counsel to the Regional Transportation Commission of Southern Nevada, where he played a key policy role in the start-up of the local transit systems and their facilities. In addition, Mr. Kaplan has had a key role in the planning and financing of numerous major public infrastructure projects in Las Vegas. Prior to starting his law firm, Mr. Kaplan spent 15 years in government service in the following capacities: Senior Deputy District Attorney with the Clark County District Attorney's Office-Civil Division; General Counsel to the Nevada Public Service Commission; and Staff Attorney to the U.S. Senate Committee on Commerce, Science and Transportation. Mr. Kaplan received a B.S. from the Smith School of Business at the University of Maryland in 1974, a J.D. from Southwestern University School of Law in 1978 and attended Georgetown University for post-graduate legal studies. He received an M.B.A. from the University of Nevada, Las Vegas in 1978.
Phillip A. McNeil (a Preferred Stock Director-Nominee), age 46, is a Managing Partner and the Chief Investment Officer of SPP Mezzanine Partners, the General Partner of SPP Mezzanine Funding, LP, a position he has held since November 2003. Prior to forming SPP Mezzanine Partners, Mr. McNeill served as Managing Director of Allied Capital Corporation, where he was co-head of its Private Finance and Mezzanine activities and a member of its Investment Committee. From the time of his appointment as Managing Director in 1998 until he left Allied Capital in 2002, the company grew from approximately $740 million in assets to nearly $2.4 billion. Mr. McNeill joined Allied Capital directly from M&T Capital, the SBIC investment division of M&T Bank, where he was a Vice President of M&T Capital/M&T Bank and an investment professional from 1988 to 1993. Mr. McNeill received a B.S in Business Administration, with concentrations in Accounting, Finance, and Law & Public Policy from Syracuse University in 1981 and an M.B.A. from Harvard Business School in 1985.
Carl J Rickertsen (a Common Stock Director-Nominee, age 45, is Managing Partner of Pine Creek Partners, a private equity investment firm, a position he has held since January 2004. From January 1998 until January 2004, Mr. Rickertsen was Chief Operating Officer and a Partner at Thayer Capital Partners, a private equity investment firm. From September 1994 until January 1998, Mr. Rickertsen was a Managing Partner at Thayer. Mr. Rickertsen was a founding Partner of three Thayer investment funds totaling over $1.4 billion and is a published author. Mr. Rickertsen is also a member of the Board of Directors of MicroStrategy, Inc., a software company; Convera Corporation, a search-engine software company; and United Agri Products, a distributor of farm and agricultural products. Mr. Rickertsen received a B.S. from Stanford University in 1983 and an M.B.A. from Harvard Business School in 1987.
Celerity CEO, C Thomas McMillen said, "We are honored to have 3 director nominees with such distinguished careers and substantial investment experience. We look forward to them joining our board and providing the company with their leadership and guidance."
The election of these candidates will be proposed to a special meeting of shareholders which is expected to be held on November 15, 2005. The meeting is also expected to address other matters. Materials will be provided to Celerity's shareholders by its transfer agent, American Stock Transfer & Trust Company, in the ordinary course.
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