Proceeds of Financing Used to Pre-Pay EOIR Promissory Notes
Company Settles Shareholder Lawsuit
BOSTON, Aug. 15, 2006 (PRIMEZONE) -- Technest Holdings, Inc. (OTCBB:TCNH), a defense and homeland security company, announced today it has entered into a financing agreement with Silicon Valley Bank (the "Bank"), which closed on August 10, 2006.
Technest and its two wholly owned subsidiaries, EOIR Technologies (EOIR) and Genex Technologies, Inc. (Genex), entered into two financing agreements with the Bank. The Credit Agreement provides for a Term Loan Facility under which the Company may borrow term loans with an initial minimum loan of $3 million. The Term Loan Facility will provide an additional $1 million on or before February 15, 2007, which is subject to certain provisions. Technest also obtained a one-year revolving line of credit ("the Revolver") with the Bank for up to $8.75 million, provided that borrowing under the Revolver is limited to 80% of Technest's eligible accounts receivable.
In addition, the maximum amount outstanding under both Credit Agreements at any time may not exceed $10 million. Both the Term Loan Facility and the Revolver are secured by all of Technest's assets and the assets of its subsidiaries, including all intellectual property.
Upon the closing of the Credit Agreements, Technest borrowed $3 million under the Term Loan Facility and approximately $4.4 million under the Revolver. The Company will use the funds to pre-pay $4.95 million of outstanding principal of certain EOIR promissory notes issued in June 2004, and fully settle the lawsuit by Joseph R. Moulton, Sr. against Markland, EOIR, and Technest's former Chief Executive Officer and former director, Robert Tarini. Once the pre-payments of the EOIR promissory notes are finalized, EOIR will have a remaining $1.7 million in notes outstanding.
Upon an additional payment to Mr. Moulton of $120,000 and the pre-payment in full of certain outstanding EOIR notes issued in June 2004 as stated above, Mr. Moulton and Technest agreed to dismiss their claims against one another.
The complete terms of the loan agreement are disclosed more fully on the Company's current report on Form 8-k.
About Technest Holdings, Inc.
Technest Holdings, Inc. is a provider of: advanced remote sensor systems, chemical detectors, intelligent surveillance and advanced 3D imaging technology solutions to the defense and homeland security marketplaces. Technest is committed to setting next-generation standards in defense and security through the provision of innovative emerging technologies and expert services. Technest's solutions support military, law enforcement and homeland security personnel. Through strategic development, Technest focuses on the creation of dual-use technology and products with applications in both the defense market and civilian homeland security and law enforcement fields. For more information, please visit the company's website at http://www.technestholdings.com.
Investors are cautioned that certain statements contained in this press release are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, applicability, benefit and use of our product and possible future actions, which may be provided by management, are also forward-looking statements as defined by the Act. Some of the factors that could significantly impact the forward-looking statements in this press release include, but are not limited to: the functionality of our product; a rejection of the Company's products and technologies by the marketplace; and disputes as to the Company's intellectual property rights. Forward-looking statements are based upon current expectations and projections about future events and are subject to risks, uncertainties, and assumptions about Technest Holdings, its products, economic and market factors and the industries in which Technest Holdings does business, among other things. These statements are not guarantees of future performance and Technest Holdings has no specific intention to update these statements. More detailed information about those factors is contained in Technest Holdings' filings with the Securities and Exchange Commission. http://www.sec.gov.Technest Holdings, Inc. is a featured Company on http://www.HomelandDefenseStocks.com, a service for which Technest Holdings compensates the provider.
Technest Holdings, Inc. is a featured Company on http://www.HomelandDefenseStocks.com, a service for which Technest Holdings compensates the provider.