LOS ANGELES, CA--(Marketwire - August 2, 2010) - Talon International, Inc. (
"The transaction today represents a major milestone and turning point for the Company; not only does it free the Company from a substantial debt burden, but it brings to the organization a major investor and partner committed to the Company and its future potential. The completion of this transaction brings a significant value improvement to all shareholders; opens the door for every shareholder to benefit from the operational and financial improvements the Company has made in the last few years; provides important operating resources to fund the Company's future growth; and provides a pathway for extended shareholder value in the future," commented Lonnie Schnell, Talon's Chief Executive Officer.
The transaction provides for the issuance of 407,160 shares of newly created Series B Convertible Preferred Stock in payment of 100% of the Corporation's outstanding indebtedness under the Revolving Credit and Term Loan Agreement dated as of June 27, 2007. Each share of the Series B preferred stock is convertible into 100 shares of Common Stock, and thus represents 40,716,000 shares of Common Stock or 51.9% of the fully diluted number of shares of common stock after issuance of the Preferred. The preferred stock has a liquidation preference equal to the amount of CVC indebtedness that was repaid at closing and such preference increases thereafter by 16% per annum. The preferred stock provides CVC the right to elect a majority of the directors serving on the Board, and in connection with the transaction Board Directors Messrs. Colin Dyne, Brent Cohen, Raymond Musci and Joseph Miller have resigned and Messrs. Michael Snyder and Mark Hughes have joined the Board. An additional Board nominee, designated by CVC, will join the Board as soon as practicable following closing.
In addition to the debt conversion, the previous Loan Agreement with CVC was revised to provide for the Corporation's continued use of the revolving credit line provided for therein, making a credit line of $3 million immediately available to the Company. The credit line will continue to be secured by the same collateral that secured the previous indebtedness under the Loan Agreement.
CVC, in agreeing to exchange its debt for equity, negotiated for the Company to retain management to operate the Corporation following the change of control occasioned by CVC's acquisition of the Preferred stock. Revised employment agreements extend the term of Mr. Lonnie Schnell as Chief Executive and Chief Financial Officer and Mr. Larry Dyne as President through December 31, 2013.
About Talon International, Inc.
Talon International, Inc. is a global supplier of apparel fasteners, trim and interlining products to manufacturers of fashion apparel, specialty retailers, mass merchandisers, brand licensees and major retailers. Talon manufactures and distributes zippers and other fasteners under its Talon® brand, known as the original American zipper invented in 1893. Talon also designs, manufactures, engineers, and distributes apparel trim products and specialty waistbands under its trademark names, Talon, Tag-It and TekFit, to more than 60 apparel brands and manufacturers including Wal-Mart, Kohl's, J.C. Penney, Victoria's Secret, Tom Tailor, Abercrombie and Fitch, Polo Ralph Lauren, Phillips-Van Heusen, Reebok and Juicy Couture. The company has offices and facilities in the United States, United Kingdom, Hong Kong, China, and Bangladesh.
Contact Information:
Company Contact
Talon International, Inc.
Rayna Hernandez
Tel (818) 444-4128