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OneTravel Holdings, Incorporated
5775 Peachtree Dunwoody Road, Building G Suite 300 Atlanta, GA 30346 o Tel
404-256-6620 o Fax 404-943-1094
(www.onetravelholdings.com)
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FOR IMMEDIATE RELEASE:
OneTravel Holdings Announces $12.5 Million Financing
ATLANTA - October 24, 2005--OneTravel Holdings, Inc. (AMEX: OTV), a leading
online and offline provider of travel and leisure services announced that it has
signed definitive agreements for and expects to close today on a $12.5 million
private placement of OTV 3 year convertible debentures and associated warrants.
Pallisades Master Fund L.P. led the investment. At the initial conversion price
of $2.55 per share, the debentures are convertible into 4,901,960 shares of the
Company's common stock. The debentures have a stated interest rate of 9%,
payable semi-annually in cash or stock, subject to certain conditions. The
warrants have an initial exercise price of $2.55 per share and, at that price,
are exercisable for a total of 1,960,784 shares of common stock of the Company.
The Company has agreed to file a registration statement covering the resale of
the shares issuable upon conversion of the debentures and exercise of the
warrants.
For a complete description of the debentures and all related documents, please
refer to the Company's 8-K that will be filed in connection with the transaction
and the transaction documents attached as exhibits to the 8-K.
Commenting on the transaction, OTV Chairman William Goldstein noted: "This
financing will enable our business to take several steps forward. We plan to
make some technology investments that will enhance the hotel booking experience
for our customers, which we expect to be a tremendous growth area for us. We are
extremely disappointed in the performance of our stock over the past few weeks.
We attribute much of the selling pressure to the failure to file the Company's
Form 10-K for the fiscal year ended June 30, 2005 in a timely manner. We
continue to work diligently and have every confidence that we will be able to
file the 10-K well in advance of the December 12, 2005 date that the AMEX
requires in order to bring us into compliance with its listing standards. As
soon as our 10-K gets filed, we will schedule a conference call to discuss our
company and provide a clearer picture of the business we have built. We are
confident the market will thereafter recognize the value we are creating that is
not reflected in our current market cap."
About OneTravel Holdings, Inc.(AMEX:OTV)
OneTravel Holdings, Inc. (www.onetravelholdings.com) derives all of its revenues
from its travel business subsidiaries, Farequest Holdings, Inc., operating under
the name 1-800-CHEAPSEATS (www.cheapseats.com) and OneTravel, Inc.
(www.onetravel.com), both of which are leading online and offline providers of a
full range of travel services, and FS SunTours, Inc., which sells leisure and
vacation travel packages under the SunTrips(R) brand (www.suntrips.com). The
Company derives additional revenue from operating other travel related web sites
including www.discounthotels.com and www.11thhour.com.
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Statements in this news release about anticipated or expected future revenue or
shareholder value growth or expressions of future goals or objectives, including
statements regarding market conditions or whether current plans to grow and
strengthen the Company's business will be implemented or accomplished, are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. When used in this release and documents, the
words "anticipate", "believe", "estimate", "expect" and similar expressions, as
they relate to the Company or its management, are intended to identify such
forward-looking statements, but are not the exclusive means of identifying these
statements. All forward-looking statements in this release are based upon
information available to the Company on the date of this release. Any
forward-looking statements involve risks and uncertainties, including the risk
that the Company will be unable to grow or strengthen its business due to a lack
of capital or a change in market demand for its products and services or to
fully or effectively integrate all business units or the inability to realize
anticipated cost savings or revenue and stockholder value growth opportunities
associated with the acquisitions of Farequest Holdings, Inc. and OneTravel, Inc.
The Company has previously mentioned in conference calls that gross bookings are
not equal to gross revenues under generally accepted accounting principles, so
no inference can be made about profitability based on gross bookings unless
expressly stated by the Company. There is also no certainty that the Company
will be successful in its quest to secure strategic alliances or its efforts to
close the sale of the SunTrips business. The Company is also subject to those
risks and uncertainties described in the Company's filings with the U.S.
Securities and Exchange Commission ("SEC"), including the Company's historical
losses and negative cash flow, its need for additional capital, including to
finance the $12,500,000 promissory notes payable to the former stockholders of
OneTravel, Inc., and that future financing, if available, will dilute the
Company's current common stockholders. The Company is also subject to increased
risk from the leverage arising under the Company's $13,000,000 of 9% secured
convertible debentures. Additionally, forward-looking statements concerning the
performance of the travel and leisure industry are based on current market
conditions and risks, which may change as the result of certain regulatory,
political, or economic events, a shift in consumer travel preferences, as well
as those risks and uncertainties described in the Company's SEC filings, which
could cause actual events or results to differ materially from the events or
results described in the forward-looking statements, whether as a result of new
information, future events or otherwise. Readers are cautioned not to place
undue reliance on these forward-looking statements. For a complete description
of the items approved at the annual stockholder's meeting, the Company's proxy
statement is available for viewing in the Company's SEC filings.
Company Contact: Investor Relations Contact:
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Marc Bercoon Rich O'Leary
President Genesis Select Corp
OneTravel Holdings, Inc. Boulder, Colorado
mbercoon@onetravel.com 303-415-0200
404-256-6620 roleary@genesisselect.com
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