Underground Solutions Announces Completion of $19.0 Million Common Stock Offering
Poway, CA (January 19, 2006) - Underground
Solutions, Inc. (Pink Sheets: symbol UGSI) announced today that
it had completed a $19.0 million private placement of common
stock at a price of $0.08 per share. The transaction closed on
January 17th. The Company issued and sold approximately 235
million shares in the offering, bringing its total outstanding
shares on a fully-diluted basis to approximately 600 million. Of
the $19.0 million in common stock sold in the offering,
approximately $12.0 million was purchased by three investment
groups, all of whom were existing investors in the Company: The
Water Fund, LP, a New York-based hedge fund; Wynnefield Partners
Small Cap Value, LP I, a New York-based investment partnership;
and DHW Water Partners, a California based investment
partnership.
The Company indicated that the funds raised in the offering will
be used for debt retirement, capital equipment, research and
development expenditures, and general corporate purposes.
Andy Seidel, the Company's President and Chief Executive Officer,
stated, "The proceeds of this offering will provide us with the
capital we need to develop a national sales presence, and to make
the investments in equipment and inventory required to achieve
the aggressive growth targets that we have established for
ourselves. Since joining the Company in December 2005, we have
recruited a number of top-tier water industry professionals to
join our existing sales organization, and we are building a
strong back-office to support our enhanced sales effort. Equally
important, we now have the means to invest in both developing new
products and enhancing our existing patented technologies to
supplement our existing cutting-edge products."
Seidel added, "Our emphasis over the next several months will be
to use our sales organization to increase awareness of the
significant advantages of our Fusible PVC™ and Duraliner™
technologies in addressing the infrastructure needs of this
country. In order to ensure that our Fusible PVC™ products are
readily available for deployment on current projects, we are
investing significantly to build Fusible PVC™ pipe inventories at
key locations across the United States."
Mark Smith, Chairman of the Board, noted, "We are grateful for
the vote of confidence evidenced by this significant new
investment in our Company. We note that the $19.0 million of new
money invested in the Company came from a combination of existing
shareholders and new investors, all of whom clearly see the
long-term value inherent in our proprietary technologies."
As announced earlier by the Company, Andy Seidel became President
and Chief Executive Officer in December 2005. Seidel is the
former CEO of United States Filter Corporation (USFilter), the
nation's leading provider of water and wastewater products,
systems and services. Mark Smith, who has led the Company since
its inception, became Chairman of the Board at that time.
Seidel was joined at UGSI by a new executive management team
which, in addition to Seidel, includes: Roop Jain, Executive Vice
President and Chief Operating Officer; Steve Stanczak, Executive
Vice President and General Counsel; and Raj Patel, Executive Vice
President and Chief Financial Officer.
Prior to the common stock offering that closed yesterday, the
Company raised $2.2 million in December and January through the
issuance of its Series B Convertible Notes. The Notes converted
into newly authorized shares of Series B Convertible Preferred
Stock at $0.08 per share effective upon the closing of the common
stock offering. The new series of Preferred Stock are
convertible into common stock of the Company on a 1:1 basis,
subject to standard anti-dilution provisions.
Underground Solutions™ is an infrastructure technology and
pipeline rehabilitation company. The Company has developed and
continues to develop unique and proprietary technologies focused
exclusively on the underground infrastructure industry.
UGSI's products developed and successfully introduced into
the market to date include Duraliner™, Fusible C-900™, Fusible
C-905™ and Fusible PVC™.
Fusible C-900™, Fusible C-905™ and Fusible PVC™ are NSF-61
certified and cover a full range of piping diameters from 3 inch
to 48 inch to provide the only available method of installing a
continuous, monolithic, gasket-free PVC pipe or conduit capable
of being used in numerous trenchless (no-dig) or conventional
"open-cut" applications. Applications for this
revolutionary technology cover every aspect of piping
installations including both pressure and non-pressure situations
in the water, sewer, electrical, industrial and
telecommunications industries.
Duraliner™ is a unique patented process which allows the Company
to rehabilitate deteriorated water lines and other pressure pipes
with minimal excavation. It is the only pipeline renewal system
resulting in a "stand alone" structural lining capable
of handling internal minimum operating pressures of 150 psi.
Duraliner™ conforms to NSF 61 Standards for Drinking Water
Components/Health Effects and has a design life exceeding 100
years.
Certain statements in this news release contain forward-looking
information within the meaning of the Private Securities
Litigation Act of 1995. Such forward-looking statements involve
certain risks, assumptions and uncertainties, including the
inability to generate and secure the necessary product sales, or
the lack of acceptance of the company's products by potential
customers. In each case actual results may differ materially from
such forward-looking statements. The Company does not undertake
to publicly update or revise its forward-looking statements even
if experience or future changes make it clear that any projected
results (expressed or modified) will not be realized.
Contact Information: Andy Seidel of Underground Solutions™, Inc.
phone: 724-353-3000; email: Toni Ziccarelli
[tziccarelli@undergroundsolutions.com].