Exhibit 99.1
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Friday June 15, 9:28 am Eastern Time
Press Release
SOURCE: MicroStrategy Incorporated
MicroStrategy Closes Refinancing of Series A Preferred Stock
MCLEAN, Va., June 15 /PRNewswire/ -- MicroStrategy(R) Incorporated (Nasdaq: MSTR
- - news), a leading worldwide provider of business intelligence software, today
announced it has successfully closed the refinancing on its Series A Preferred
Stock.
"We are pleased to announce that we have closed the refinancing of the Series A
Preferred securities," said Eric Brown, president and chief financial officer of
MicroStrategy Incorporated. "We modified the terms of the refinancing,
originally announced in April 2001, in a manner that is advantageous to the
Company."
Without the refinancing, the holders of these securities would have been
entitled to convert $125 million stated value of Preferred Stock into shares of
Class A Common Stock at a conversion price per share that would have reset to
the average market price of the Company's Class A Common Stock during a
ten-trading day period starting on June 20, 2001. With the refinancing, only
$6.5 million stated amount of the Series A Preferred Stock will remain
outstanding and the Company will now have the option to redeem for cash $1.2
million stated value of its outstanding Series A Preferred Stock on or prior to
December 11, 2001. In connection with the refinancing, the Company redeemed or
exchanged all other outstanding Series A Preferred Stock as follows:
* $38.75 million stated value of Series A Preferred and accrued
dividends on all preferred stock being exchanged were exchanged for
5,568,466 shares of Class A Common Stock and $16.261 million stated
value of Series D Preferred Stock, with a fixed conversion price of
$5.00 per share;
* $33.125 million stated value of Series A Preferred was exchanged
for an equivalent stated value of Series B Preferred Stock, with a
fixed conversion price of $12.50 per share; and
* $27.825 million stated value of Series A Preferred was exchanged
for an equivalent stated value of Series C Preferred Stock, with a
fixed conversion price of $17.50 per share; and
* $6.3 million stated value of Series A Preferred was exchanged for
an equivalent stated value of Series E Preferred Stock. The Series
E Preferred Stock will not be convertible into Class A Common Stock
prior to December 11, 2001. The
conversion rate after December 11, 2001 will equal the average of the
dollar-volume weighted average prices of the Common Stock on each of
the 10 consecutive trading days immediately preceding such date.
* $12.5 million stated value of Series A Preferred were redeemed for
$12.5 million in cash.
The Series B Preferred Stock and the Series C Preferred Stock have a three-year
maturity and accrue dividends at the rate of 12.5% per year, payable in cash or
Class A Common Stock at the election of the Company, subject to satisfaction of
certain conditions. At the option of the Company, the Series B and Series C
Preferred Stock may be redeemed at maturity at par value plus accrued dividends
or mandatorily converted into Class A Common Stock at the lower of their
respective fixed conversion prices or 95% of the average of the dollar
volume-weighted average price of the Class A common stock during the 30
consecutive trading days immediately preceding the maturity date. The Series D
Preferred Stock has a three-year maturity, will not pay dividends, and will have
a fixed conversion price of $5 per share. At maturity, the Series D Preferred
Stock mandatorily converts into Class A Common Stock at the fixed conversion
price of $5 per share.
The Series E Preferred Stock has a three-year maturity, will pay dividends at
the rate of 12.5% per annum for the first 90 days after the Closing, 15.0% per
annum for the subsequent 90 days period and 17.5% per annum thereafter. The
Company will have the right to redeem the Series E Preferred Stock prior to
December 11, 2001 at a price equal to 105% of the stated value plus accrued
dividends if redeemed on or before October 27, 2001, 110% of the stated value
plus accrued dividends if redeemed from October 28, 2001 through December 31,
2001 and at 120% of the stated value plus accrued dividends thereafter. Holders
of Series E Preferred Stock have the right to require the Company to redeem the
Series E Preferred Stock if the Company receives cash from a financing
transaction certain assets sales and from certain other events by the Company.
Holders of Series E Preferred Stock have the right to require the Company to
redeem the Series E Preferred Stock at any time after July 14, 2002 at such
holder's option at a price equal to 120% of the stated value plus accrued
dividends.
In conjunction with the refinancing, each investor separately agreed with the
company to limit its net sales of the company's stock to no more than the
cumulative volume of 5% of the daily trading volume as reported by Bloomberg
Financial Markets after June 14, 2001 or, in the case of the investor which
continues to hold shares of Series A Preferred Stock after three trading days
after the 10 day repricing period for the Company's Series A Preferred Stock
ends on July 3, 2001. The Company redeemed the $12.5 million of Series A
Preferred using its existing cash.
About MicroStrategy
For 11 years, MicroStrategy has helped corporations transform their operational
data into actionable information. Its main product is MicroStrategy 7(TM), the
scalable business intelligence platform built specifically for the Internet. Its
pure-web architecture provides the Web reporting, security, performance, and
standards that are critical for deployment over the Internet. With proven data
and user scalability, MicroStrategy is the only solution capable of analyzing
today's growing multi- terabyte data warehouses and distributing information to
millions of users via Web, wireless and voice. The open and flexible platform
provides the business intelligence foundation for all query, reporting and
advanced analytical applications across the enterprise and out to partners and
customers in extranet deployments.
MicroStrategy has approximately 1,100 enterprise-class customers, including
Lowe's Home Improvement Warehouse, AT&T Wireless Group, First Union Corporation
and GlaxoSmithKline. MicroStrategy also has relationships with over 200 systems
integrators, application development, and platform partners, including IBM,
PeopleSoft, Compaq, Informatica and JD Edwards.
MicroStrategy was founded in 1990 and is listed on Nasdaq under the symbol MSTR.
For more information on the company, or to purchase or demo MicroStrategy's
software, please visit MicroStrategy's Web site at http://www.microstrategy.com.
MicroStrategy is a registered trademark of MicroStrategy Incorporated in the
United States and certain other countries. Other product and company names
mentioned herein may be the trademarks of their respective owners.
This press release may include statements that may constitute "forward- looking
statements," including its estimates of future business prospects or financial
results and statements containing the words "believe," "estimate," "project,"
"expect" or similar expressions. Forward-looking statements inherently involve
risks and uncertainties that could cause actual results of MicroStrategy
Incorporated and its subsidiaries (collectively, the "Company") to differ
materially from the forward-looking statements. Factors that could contribute to
such differences include: the possibility that the securities class action and
shareholder derivative settlement agreements will not obtain court approval or
that the other conditions to the settlements will not be satisfied; the
Company's ability to secure financing for its current operations and long-term
plans on acceptable terms; the ability of the Company to implement and achieve
widespread customer acceptance of its MicroStrategy 7 software on a timely
basis; adverse reaction by the Company's employees, investors, customers,
vendors and lenders to the restatement of the Company's financial results or its
future prospects; the Company's ability to recognize deferred revenue through
delivery of products or satisfactory performance of services; continued
acceptance of the Company's products in the marketplace; the timing of
significant orders; delays in the Company's ability to develop or ship new
products; market acceptance of new products; competitive factors; general
economic conditions; currency fluctuations and other risks detailed in the
Company's registration statements and periodic reports filed with the Securities
and Exchange Commission. By making these forward-looking statements, the Company
undertakes no
obligation to update these statements for revisions or changes after the date of
this release.