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Dialogic Announces A $39.5 Million Debt Exchange

Stocks in this article: DLGC

Dialogic Inc. (NASDAQ:DLGC), a leading provider of communications technologies that power advanced networks, announced today that it has signed securities purchase agreements with a broad group of its largest existing shareholders and their affiliates. Under the terms of the securities purchase agreement, the purchasers have been issued convertible notes in the amount of $39.53 million in exchange for debt and term loan pre-payment premiums. The convertible notes will be converted into common shares in Dialogic Inc. (“Company”) upon stockholder approval, which is expected at the June stockholder’s meeting. All debt and loan pre-payment premiums covered by the convertible notes will be exchanged at the rate of $1.00 per share of common stock with the exception of $2.96 million representing interest from the first quarter of 2012 that was not paid in cash, was added to principal and will now convert at the rate of $0.87 per share of common stock. Upon the conversion of the convertible notes into common shares following stockholder approval, the Company expects to reduce the principal of its long-term debt held by Tennenbaum Capital Partners, LLC and certain of its affiliates from $92.83 million to $59.88 million, to eliminate its related party long-term debt of $5.07 million and to increase its common shares outstanding from 31.48 million to approximately 71.45 million. Consistent with the reduction in debt, the Company expects to reduce its 2012 quarterly cash interest by $2.60 million or $10.60 million annually.

This press release does not and shall not constitute an offer to sell or the solicitation of any offer to buy any of these securities.

For additional information, please refer to Dialogic’s current report on Form 8-K to be filed with the Securities Exchange Commission with respect to this transaction.

About Dialogic

Dialogic (NASDAQ: DLGC) develops products and technologies that enable operators to provide – and subscribers to enjoy - an enhanced mobile experience. Whether our products are used in mobile value-added service solutions or to transform, connect and optimize communications services, Dialogic understands that mobile experience matters. Our technology touches over two billion mobile subscribers a day and our network solutions carry more than 15 billion minutes of traffic per month.

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