Smith & Wesson Holding Corporation, parent company of Smith & Wesson Corp, the legendary 154-year old company in the global business of safety, security, protection and sport, announced that in accordance with an agreement dated September 2005, it has purchased 1,200,000 shares of its common stock from three of the Company's original investors for a price of $5.33 per share.
Those shares were purchased in order to eliminate the dilutive impact of equivalently priced warrants that were issued to new institutional investors in September 2005, all of which were recently exercised.
As previously disclosed, the Company completed a private placement to institutional investors in September 2005 in which it sold 6,000,000 shares of common stock and warrants to purchase an additional 1,200,000 shares of common stock at an exercise price of $5.33 per share.
The proceeds from the private placement were used to purchase, at a significant discount, approximately 9,000,000 warrants from two of the Company's initial investors in order to alleviate the substantial overhang of those warrants which the Company believed, if left outstanding would have been dilutive to the Company's stockholders.
In order to remove the potential dilutive effects of the warrants issued in the September 2005 private placement, the Company simultaneously entered into an agreement with three of its original investors to purchase from them an equivalent number of shares, at the same price, in the event the September 2005 investor warrants were exercised.
All of the September 2005 investor warrants were recently exercised, and the Company has therefore exercised its right to purchase a total of 1,200,000 shares at a price of $5.33 per share from original investors Mitch Saltz, Colton Melby, and Robert Scott, who are also directors of the Company.
Smith & Wesson Holding Corporation
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