Deep Down Reduces Debt
Deep Down has exchanged 2,250 shares ($2,250,000 aggregate face value) of Series E Redeemable Exchangeable Preferred Stock from Ronald E. Smith, president and chief executive officer of Deep Down, and Mary L. Budrunas, director of Deep Down, for 2,250,000 shares of common stock.
The Preferred Stock had a face value and liquidation preference of $1,000 per share, no dividend preference, and was exchangeable at the holder's option after June 30, 2007, into 6% subordinated notes due three years from the date of exchange.
"With this Preferred Stock transaction, we have reduced indebtedness by another $2,250,000, thereby continuing our efforts to strengthen Deep Down's balance sheet. In addition, the Company has eliminated future non-cash interest charges associated with these shares of Preferred Stock. The value of the common stock received by Mr. Smith and Ms. Budrunas, based on the closing price on September 13, 2007, the date of agreement, was $1,473,750. Mr. Smith and Ms. Budrunas are signaling their confidence in the future of Deep Down by effectively accepting shares of common stock as if it were priced at $1.00 per share," commented Robert E. Chamberlain, Jr., Deep Down's chairman.