EX-99.2 3 d87181ex99-2.txt PRESS RELEASE DATED MAY 11, 2001 1 EXHIBIT 99.2 INTEGRATED SECURITY SYSTEMS, INC. ANNOUNCES RESULTS OF ANNUAL MEETING Irving, Texas - May 11, 2001 - Integrated Security Systems, Inc. (OTCBB Symbol: IZZI) today announced the results of its annual stockholders meeting which was held on May 10, 2001 at the Company's executive offices. The stockholders of the Company elected the following persons to serve as directors until the Company's next annual meeting or until their successors are duly elected: C.A. Rundell, Jr. Alan M. Arsht, William D. Breedlove, Russell Cleveland, Robert M. Galecke, John P. Jenkins and Frank R. Marlow. The proposal to approve financial restructuring transactions for the Company was also approved. This transaction was initially proposed in November 2000, but required stockholder approval for consummation. With the approval of this transaction, the Company will convert all promissory notes and convertible debentures currently held by Renaissance Capital Growth & Income Fund III, Inc. Renaissance US Growth & Income Trust PLC, C.A Rundell, Jr., The Rundell Foundation HBW Investment Partners II, L.P. and HBW Capital Fund, L.P. into shares of newly created series of convertible preferred stock thus significantly lowering the interest expense and debt service requirements of the Company. The total amount of promissory notes converted will be $3.3 million, plus accrued interest and the total amount of convertible debentures converted will be $4.1 million, plus accrued interest. This transaction will leave the Company's balance sheet with $1.3 million of short-term and long-term debt. Although this financial restructuring, assuming conversion of the preferred stock, decreases the percentage ownership of the current Common Stock holders from approximately 26.4% to 16.6%, the restructuring significantly strengthens the balance sheet and the overall cash position of the Company. Since the Company has been in payment default and covenant default of the convertible debentures for several months prior to the proposed restructuring, the board of directors of the Company felt that this restructuring was in the best interest of the stockholders. The stockholders also approved three additional proposals at the meeting; (a) an amendment to the Company's certificate of incorporation to increase the number of authorized shares of Common Stock from 35,000,000 to 75,000,000; (b) an amendment to the Company's certificate of incorporation to reduce the liquidation preference of the Series D Preferred Stock; and (c) an amendment to the Company's 1997 Omnibus Long-Term Incentive Plan to increase the number of shares of Common Stock which may be issued under the plan from 2,000,000 to 7,500,000. "The Board of Directors of the Company looks forward to the challenges of focusing on the operations and future growth of the Company now that the financial restructuring is complete," commented C.A. Rundell, Jr., the Chairman of the Board. "The sales potential for the Intelli-Site product has dramatically increased with the release of the module-based product in early April 2001. Also, we remain optimistic about the sales potential for our railroad safety barrier gate. In addition, we are pleased with the progress that has been made thus far by the recent changes in our infrastructure both at Intelli-Site and B&B." 2 Attached is a balance sheet as of March 31, 2001 adjusted to give effect to the financial restructuring approved at the May 10, 2001 stockholder's meeting. The impact of this restructuring was to reduce the company's interest burden and strengthen the balance sheet at a cost of dilution to the stockholders as described in the proxy statement previously filed with the Securities and Exchange Commission. Headquartered in Irving, Texas, IZZI is a high technology company that designs, develops and markets security software to the commercial, industrial and governmental marketplaces. IZZI's Intelli-Site NT provides users with a software solution that integrates existing subsystems from multiple vendors without incurring the additional costs associated with upgrades or replacement. Intelli-Site NT features a user-defined graphics interface that controls various security devices within one or multiple facilities. IZZI is also a leading provider of traffic control and safety systems within the road and bridge and perimeter security gate industries. In addition, IZZI designs, manufactures and distributes automatic gates for highway railroad crossings including FHWA-accepted safety barrier gates that are designed to prevent vehicular intrusion onto railroad crossings. IZZI conducts its design, development, manufacturing and distribution activities through two wholly owned subsidiaries: Intelli-Site, Inc. and B&B Electromatic, Inc. This press release may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. It is important to note that IZZI's actual results could differ materially from those projected by such forward-looking statements. Important factors that could cause actual results to differ materially from those projected in the forward-looking statements include, but are not limited to, the following: operations may not improve as projected, new products may not be accepted by the marketplace as anticipated, or new products may take longer to develop than anticipated. Additional information concerning the factors that could cause IZZI's actual results to differ may differ materially from IZZI's current expectations is contained in the Company's filings with the Securities and Exchange Commission. 3 INTEGRATED SECURITY SYSTEMS, INC. UNAUDITED PRO FROMA CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, 2001
Historical Pro Forma (1) ------------- ------------- ASSETS Current assets: Cash and cash equivalents $ 79,178 $ 79,178 Accounts receivable 1,078,478 1,078,478 Inventories 591,200 591,200 Other current assets 155,261 155,261 ------------- ------------- Total current assets 1,904,117 1,904,117 Property and equipment, net 840,558 840,558 Other assets 16,411 16,411 ------------- ------------- Total assets $ 2,761,086 $ 2,761,086 ============= ============= LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 1,026,529 $ 413,374 Accrued liabilities 488,196 463,011 Current portion of long-term debt and other liabilities 8,067,824 619,622 ------------- ------------- Total current liabilities 1,904,117 1,496,007 Long-term debt and other liabilities 649,747 649,747 Preferred stock subject to redemption -- 6,561,520 Stockholders' deficit Preferred stock 1,023 1,633 Common stock 107,824 107,824 Additional paid-in-capital 14,609,314 16,133,727 Accumulated deficit (22,070,621) (22,070,621) Treasury stock, at cost - 50, 000 shares (118,750) (118,750) ------------- ------------- Total stockholders' deficit (7,471,210) (5,946,187) ------------- ------------- Total liabilities and stockholders' deficit $ 2,761,086 $ 2,761,086 ============= =============
(1) Gives effect to the financial restructuring approved at the stockholder meeting on May 10, 2001. ###