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Homeland Security Capital Corporation Agrees To Sell Its Subsidiary, Safety And Ecology Holdings Corporation, To Perma-Fix Environmental Services, Inc. For $24.5 Million

Stocks in this article: HOMS

Homeland Security Capital Corporation (OTCBB: HOMS, “Homeland” or the “Company”), an international provider of specialized technology-based radiological, nuclear, environmental, disaster relief, electronic security solutions and domestic real estate disposition services to government and commercial customers, announced today that on July 15, 2011, it entered into a definitive agreement to sell all of the capital stock of its wholly-owned subsidiary, Safety and Ecology Holdings Corporation, to Perma-Fix Environmental Services, Inc. (NASDAQ: PESI) for $24.5 million.

The $24.5 million consideration consists of (i) $22 million in cash, subject to working capital adjustments, payable at closing, and (ii) a 3-year, unsecured promissory note in the principal amount of $2.5 million, bearing interest at 6% per year payable in 36 equal monthly installments. Of the cash consideration, $2 million will be deposited into an escrow account for 24 months to satisfy any indemnification claims under the agreement. As part of the transaction, up to $1.25 million will be used to repurchase at least 90% of the Company’s issued and outstanding Series I Convertible Preferred Stock and up to 22,000,000 warrants, which the Company believes will significantly enhance its capital structure. The sale, which has already received the necessary approval of the Company’s stockholders under applicable law, which approval will not be effective until at least 20 calendars days after an Information Statement has been furnished to the Company’s stockholders in accordance with Rule 14c-2 under the Securities Exchange Act of 1934, as amended, is expected to close no later than August 30, 2011.

SunTrust Robinson Humphrey acted as exclusive financial advisor to Homeland Security Capital Corporation for the transaction.

C. Thomas McMillen, Chairman and CEO, stated, “The sale of Safety and Ecology advances our plan to improve our balance sheet by retiring debt and focus our efforts on new lines of business.” Mr. McMillen further commented, “We have been dedicated to maximizing shareholder value and this sale is another step toward that goal.”

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