– Transaction Strengthen’s Position of Common Stockholders –
LOUISVILLE, Ky., November 7, 2011 — Lightyear Network Solutions, Inc. (the “Company”) (OTCBB:LYNS, news, filings), an established provider of data, voice and wireless telecommunication services to business and residential customers throughout North America, today announced that it has completed a transaction to redeem all of its outstanding shares of convertible preferred stock.
In the transaction, the Company redeemed 9.5 million shares of convertible preferred stock held by LY Holdings, LLC (“LYH”), plus the preferred stockholders surrendered their rights to accrued dividends of approximately $2.2 million, in exchange for receivables due to the Company totaling approximately $12.9 million. The convertible preferred stock redemption is expected to result in a fourth quarter, one-time, non-cash deemed preferred stock dividend of approximately $10.7 million, which will be presented in the statement of operations as a deduction to arrive at the loss attributable to common stockholders.
“We are pleased to announce the redemption of our convertible preferred stock,” said Stephen M. Lochmueller, Lightyear’s Chief Executive Officer. “Since I became CEO, a key objective was to minimize the dividend obligations and preferential position of our convertible preferred stockholders and to strengthen the position of the Company’s common stockholders.”
As a result of the transaction, the Company’s common stock is the only class of capital stock that is issued or outstanding. As of September 30, 2011, 22,089,888 of common shares were issued and outstanding.
“We believe that the redemption of our convertible preferred stock will have an immediate impact on how our stock is viewed,” said Randy Ammon, Lightyear’s President and Chief Operating Officer. “The net loss per share attributable to the common stockholders would have been reduced by nearly $0.02 per share during the first six months of 2011 primarily by the elimination of the convertible preferred stock dividend had this transaction been recorded as of January 1, 2011.”
Mr. Lochmueller added, “By eliminating our convertible preferred stock, we believe this helps improve the attractiveness of Lightyear’s common stock and shows management’s commitment to our common stockholders.”
Additional information regarding this transaction may be found in the Company’s Form 8-K dated November 7, 2011, as filed with the Securities and Exchange Commission.
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