Integrated Security Systems recapitalizes debt and preferred equity

By Devika Patel

Knoxville, Tenn., June 11 - Integrated Security Systems, Inc. said it has obtained approval from its debtholders to convert all of the secured debt and unsecured debt into common shares. A substantial portion of its preferred shareholders have also agreed to convert their shares into common shares.

As a result of this conversion, the company's assets will exceed its liabilities for the first time since 1998. Also, the debt conversion will result in a substantial reduction of interest expense.

As a result of the recapitalization, the company will have 559 million common shares outstanding. In addition, 105 million new warrants, exercisable at $0.06 per share, have also been issued to the converting debt holders and preferred stockholders.

"The support from our debt and preferred share holders is greatly appreciated," chairman and chief executive officer Brooks Sherman said in a press release. "With the large burden of debt lifted from the company, the opportunity for the company to survive and prosper is greatly improved."

"For the first time in years, the company's assets exceed its liabilities, and while immediate cash flow for operations continues to be a concern, the balance sheet has been substantially strengthened," chief financial officer Sharon Doherty added in the release.

Integrated, based in Irving, Texas, develops traffic-control devices.

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