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Talon redeems all outstanding Series B convertible shares
17
Jul '13
Talon International, Inc., a leading global supplier of zippers, apparel fasteners, trim and stretch technology products, announced that it has redeemed all of the outstanding shares of its Series B convertible preferred stock for $13.0 million in cash and a short-term, low-interest bearing promissory note of $5.8 million, for a total consideration of $18.8 million.

The redemption of the preferred shares removes the Company's current liquidation preference obligation of $25.9 million, which entitled the preferred shareholders to payment of the preference amount before payment to the common stockholders.

The liquidation preference was scheduled to increase to $40.7 million at the time the preferred shares became mandatorily redeemable in 2016. The removal of this obligation results in an immediate benefit to common stockholders of approximately $7.0 million. The Company now has only common shares outstanding.

To complete the redemption, the Company received a $5.5 million strategic equity investment from a group of private investors, including a former Board member and the current Chairman of the Board. This investment, which consists of the sale of common stock at a price of $0.09 per share, together with the Company's cash and the short-term note, enabled the Company to repurchase all of the Series B convertible preferred stock at a significant discount to its current liquidation preference amount.

Lonnie Schnell, Talon's CEO stated, "The redemption of preferred shares and the successful equity raise that made it possible, are major achievements and important milestones for Talon International. The elimination of the preferred stock from our capital structure improves our risk profile, enhances our financial flexibility and removes a major impediment to creating value for common shareholders."

As a result of the equity raise, Talon's executive management team received shares of common stock upon settlement of previously issued restricted stock units, increasing management's ownership by approximately 4.8 million shares.

About Talon International, Inc.

Talon International, Inc. is a major supplier of customer zippers, complete trim solutions and stretch technology products to manufacturers of fashion apparel, specialty retailers, mass merchandisers, brand licensees and major retailers worldwide. Talon develops, manufactures and distributes custom zippers exclusively under its Talon brand ("The World's Original Zipper Since 1893"); designs, develops, manufactures, and distributes complete apparel trim solutions and products; and provides stretch technology for specialty waistbands all under its trademark and world renowned brands, Talon, and TekFit to major apparel brands and retailers.

Talon International


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