GVI Security lands $4.75 million in funding
CARROLLTON, Texas--After a period of uncertainty (search "GVI in search of funding," at www.securitysystemsnews.com), GVI Security, Samsung's North American distributor, announced Oct. 6 the private placement of $4.75 million of its securities. At the same time, those investors were added to a board of directors that experienced a near-total turnover.
The purchasers of the securities comprised accredited investors led by GVI Investment Company, a Nevada limited liability company formed for the purpose of participating in the private placement. GVI Investment, which purchased $2.5 million of securities, is led by David Weiner, president of investment firm W-Net and now a member of GVI's board of directors. He is joined on the board by fellow investors Craig Ellins, founder of helloNetwork; Gary Freeman, a current board member of Blue Holdings; and Moshe Zarmi, the former chief executive of Geotest. Steve Walin, GVI's chief executive officer, remains on the board, and Joseph Restivo, the company chief financial officer, has also joined.
The $4.75 million was raised through the sale of common stock priced at $.004 a share and six percent convertible promissory notes convertible into common stock at a conversion price of $.004 a share. Assuming all of the notes are converted, the investors will own approximately 96 percent of GVI's common stock, with GVI Investment owning 48 percent. GVI expects to effect a 50-to-1 reverse stock split in order to have sufficient authorized shares of common stock to permit that conversion of the notes. As much as 1,125,000,000 shares will be needed.
What will be done with the money? Much of it will be used to pay for inventory owed to Samsung. The rest, said Walin, will be used "to continue to invest in sales and marketing, to take GVI into the future from where it is today, which is a nice double-digit growth rate."