FRISBY TECHNOLOGIES, INC. (NASDAQ – FRIZ), the developer of patented ComforTemp®, the world’s leading brand of dynamic climate control materials, announced today that it obtained a revolving credit facility of up to $600,000. The financing was provided in equal parts by two current stockholders of the Company, MUSI Investments S.A. ("MUSI") of Luxembourg and Finpart International S.A. ("Finpart"), a wholly owned subsidiary of Fin. part. SpA, a $300 million publicly held, Italian holding company based in Milan.
The Company further announced that it has recently tailored its operating plan in a manner designed to effectively and efficiently deploy its cash and human resources. Towards this end, Frisby has eliminated approximately $2 million in spending from its 2002 operating expense budget, which now reflects a spending reduction of nearly 28% and 40% when compared to 2001 and 2000 expenditure levels, respectively.
Commenting on today's announcements, Duncan R. Russell, president and chief operating officer of Frisby said, "This new credit facility provides Frisby with much-needed support, and we are appreciative of the backing of MUSI and Finpart. If we are able to achieve the revenue levels that we forecast in our revised operating plan, we currently project that the cash available as a result of this new financing and improved cash flow from operations should be sufficient to satisfy our operational requirements through the end of 2002. We will continue to seek additional investment to fund strategic initiatives designed to provide long term and sustainable value to our stockholders."
The credit facility accrues interest at the prime rate plus 0.75%. The credit facility will be available to fund certain employee-related expenses and has a maturity date of June 3, 2004. All or any portion of the outstanding principal and accrued interest is convertible into shares of the Company’s common stock based on a conversion price equal to the lesser of the 30-day trailing average closing price of the common stock on the NASDAQ stock market on the date of conversion and the then-effective exercise price of certain warrants issued in connection with the Company’s existing credit facility. The lenders also have the right to purchase shares of common stock in an aggregate amount equal to $600,000 less the outstanding principal amount converted or convertible under the credit facility, at a per share price equal to the conversion price. The lenders received a third security interest in certain of the Company’s assets.
Frisby Technologies Inc. is the global leader in the development of dynamic thermal management solutions for the apparel, footwear, sporting goods, packaging, home furnishings, healthcare and electronic industries. ComforTemp® insulating and cooling foams, fabrics, nonwovens, leathers and gels can be found in more than 1000 products from over 120 of the world’s leading brands such as Timberland, Kenneth Cole, Polo RLX, FootJoy, 180’s, Schoeller Textil, Orvis, Kingsdown, Spyder, Sure Foot Corporation, Wolverine, Puma and Rocky. For more information, contact Frisby Technologies Inc. at 877-444-COMFORT, visit www.comfortemp.com or join the Frisby electronic news distribution list by sending your email address to firstname.lastname@example.org.
C° , the degree symbol, COMFORTEMP, DCC and The Ultimate Degree of Comfort are trademarks or registered trademarks of Frisby Technologies Inc. (NASDAQ: FRIZ).
Certain statements in this press release are forward-looking in nature and relate to the Company’s plans, objectives, estimates and goals. Words such as "expects," "anticipates," "intends," "plans," "projects," "forecasts," "believes," and "estimates," and variations of such words and similar expressions, identify such forward-looking statements. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and speak only as of the date of this report. The statements are based on current expectations, are inherently uncertain, are subject to risks and uncertainties and should be viewed with caution. Actual results and experience may differ materially from those expressed or implied by the forward-looking statements as a result of many factors, including, without limitation, those set forth under "Business -- Additional Factors that may Affect the Company’s Business and Future Results" in the Company’s most recent Annual Report on Form 10-KSB and under "Risk Factors" in the Company’s Registration Statement on Form S-3/A filed with the Securities and Exchange Commission on May 30, 2002 and, in addition, the level of acceptance of the Company's thermal management products by consumers and industrial partners both domestically and internationally and the Company's ability to identify, develop and market new products, to develop, maintain or expand relationships with capable suppliers, to protect its intellectual property adequately and to secure capital as and when needed. The Company makes no commitment to update any forward-looking statement or to disclose any facts, events, or circumstances after the date hereof that may affect the accuracy of any forward-looking statement.
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