COSINE COMMUNICATIONS, INC. LOS GATOS, Calif., June 18, 2015 /PRNewswire/ -- CoSine Communications, Inc. ("CoSine") (Other OTC: COSN), today announced a net loss of $2,979,000 or $(0.13) per share for the quarter ended March 31, 2015 as compared to net loss of $165,000 or $(0.02) per share for the quarter ended March 31, 2014. The increase in the net loss for the quarter ended March 31, 2015 as compared to the quarter ended March 31, 2014 was due primarily to transactional expenses and foreign currency remeasurement charges incurred in connection with the tender offer for API Group Plc and related transactions.
Acquisition of API Group Plc and Related Transactions
As previously reported, on January 20, 2015, CoSine entered into a contribution agreement with Steel Partners Holdings L.P. ("SPH") pursuant to which CoSine issued to a wholly owned subsidiary of SPH 16,500,000 newly issued shares of CoSine's common stock as well as 12,761 shares of CoSine's newly designated and issued 7.5% Series B Non-Voting Cumulative Preferred Stock with a face value of $12,761,000 in exchange for (i) 24,807,203 ordinary shares of API Group Plc ("API") representing approximately 32.3% of the entire existing issued share capital in API, and (ii) 445,456 shares of common stock of Nathan's Famous, Inc. (the "Contribution"). As a result of the Contribution, SPH, through its wholly owned subsidiaries, now controls approximately 80.6% of CoSine's issued and outstanding common stock.
Also as previously reported, on January 22, 2015, Cedar 2015 Limited, a wholly-owned subsidiary of CoSine incorporated in England and Wales ("Cedar Bidco"), then commenced a cash tender offer to acquire all of the remaining issued and to be issued shares in API not already owned by CoSine or Cedar Bidco (the "Offer"). At March 19, 2015, Cedar Bidco's holdings, when combined with tendered API shares, exceeded a total of over 97% of the entire existing issued share capital in API. Having received acceptances of the Offer in excess of 90% of the API shares to which the Offer related, including the respective voting rights thereof, Cedar Bidco then exercised its rights in accordance with applicable UK law to acquire compulsorily any remaining API shares to which the Offer related on the same terms as the Offer. As of May 15, 2015, Cedar Bidco had acquired legal or beneficial ownership of 100% of existing issued share capital in API.
CoSine's March 31, 2015 financial statements reflect the Contribution, the acquisition of API and related transactions. Since CoSine did not have control of the API board at March 31, 2015, the investment in API is presented in CoSine's March 31, 2015 financial statements as a non-consolidated long term investment. As of May 11, 2015, the API board was reconstituted pursuant to which CoSine now has indirect control of the API board. CoSine expects that its future consolidated financial statements will include the full consolidation of API, net of non-controlling interests, if any.
For its fiscal year ended March 31, 2015, API reported revenues of £109,376,000 and operating profit before exceptional items of £4,409,000, as presented under International Financial Reporting Standards as adopted by the European Union.
CoSine Director Steps Down
CoSine reported today that Don Green has resigned as a director of CoSine for personal reasons. "Mr. Green has served as Chairman of the Board since March 2002 and as a director since June 1999. CoSine thanks him for his many years of service," commented CoSine's President, Terry Gibson.
About CoSine Communications
CoSine's Certificate of Incorporation limits the ability of any group or person to acquire 5% or more of CoSine's common stock (subject to certain exceptions as provided in the Certificate of Incorporation).
CoSine has also adopted a Rights Agreement to deter acquisitions of 5.0% or more of the Company's common stock (subject to certain exceptions) by any group or person.
CoSine's common stock is currently traded on the OTC Pink(®) marketplace under the symbol COSN and its website is www.cosinecom.com.
About API Group Plc
API is a manufacturer and distributor of foils, films and laminates used to enhance the visual appeal of products and packaging, serving industrial markets in Europe, North America and Australasia from production operations in the UK and US. Head-quartered in Poynton, North West England, API's global operations employ more than 550 people in 15 locations.
Cautionary note regarding forward-looking statements
This press release contains certain forward-looking statements with respect to the financial condition, results of operations and business of CoSine. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the board of directors of CoSine in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this press release could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this press release. CoSine assumes no obligation to update or correct the information contained in this press release, whether as a result of new information, future events or otherwise, except to the extent legally required.
The statements contained in this press release are made as at the date of this press release, unless some other time is specified in relation to them, and issuance of this press release shall not give rise to any implication that there has been no change in the facts set out in this press release since such date. Nothing contained in this press release shall be deemed to be a forecast, projection or estimate of the future financial performance of CoSine except where expressly stated.
For additional information contact:
Terry Gibson
(408) 399-6494
E-mail: Terry.Gibson@spcorpservices.com
CoSine Communications, Inc.
STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended
March 31,
(Unaudited)
2015 2014
---- ----
Revenue: $ - $ -
Operating expenses:
Impairment
loss on
available
for sale
investment 5,598 -
General and
administrative 996 164
--- ---
Total
operating
expenses 6,594 164
----- ---
Loss from
operations (6,594) (164)
Dividend
income 5,552 -
Interest
expense (336) -
Gain on sale
of
available
for sale
securities 679 -
Loss on
foreign
currency
remeasurement (1,887) -
Other income
(expense) (51) -
--- ---
Loss before
provision
for income
taxes (2,637) (164)
Income tax
provision 342 1
--- ---
Net Loss $(2,979) $(165)
------- -----
Basic net
loss per
share $(0.13) $(0.02)
====== ======
Diluted net
loss per
share $(0.13) $(0.02)
====== ======
Shares used in computing basic and
diluted net loss per share
Basic 22,723 9,790
====== =====
Diluted 22,723 9,790
====== =====
CoSine Communications, Inc.
CONDENSED
BALANCE SHEETS
(in thousands)
March 31, December 31,
2015 2014
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $24,590 $17,710
Dividends receivable 5,552 -
Available for sale
securities 12,125 -
Prepaid expenses and
other current
assets 90 5
Total current assets 42,357 17,715
Long term
investments 66,687 -
Long-term deposits 3 3
$109,047 $17,718
-------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $137 $281
Other accrued
liabilities 936 343
Accrued interest
payable 336 -
Accrued income taxes
payable 343 -
Total current
liabilities 1,752 624
Note payable 37,000 -
Total liabilities 38,752 624
Stockholders' equity:
Preferred stock 12,761 -
Common stock 3 1
Additional paid-in
capital 580,155 538,674
Other comprehensive
income (loss) 1,936 -
Accumulated deficit (524,560) (521,581)
Total stockholders'
equity 70,295 17,094
------ ------
Total liabilities
and stockholders'
equity $109,047 $17,718
-------- -------
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SOURCE CoSine Communications, Inc.
