ChatCom, Inc. reports completion of $2.5 million private placement.CHATSWORTH, Calif.--(BUSINESS WIRE)--Jan. 13, 1997--ChatCom, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CHAT), today announced that it has completed a $2,500,000 private placement of its securities with two investment funds Noun 1. investment funds - money that is invested with an expectation of profit investment assets - anything of material value or usefulness that is owned by a person or company managed by High View Capital, a New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of money management firm. The financing consists of $2,496,000 Series D 10% convertible redeemable voting preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , convertible into common stock by ChatCom at any time during the first year, beginning on Dec. 14, 1996, and by the holders during the second year, beginning on Dec. 14, 1997. The conversion price will be at market for the common stock, with a cap of $4.50 per share and a floor after the first year of $1.50 per share. The holders of the preferred stock also have purchased warrants to purchase 400,000 shares of ChatCom common stock which are exercisable beginning on May 1, 1997 through Dec. 13, 2001 at $3.125 per share. ChatCom has agreed to register the shares issuable upon conversion of the preferred stock or exercise of the warrants. The proceeds from the placement will be used to provide working capital, including potential expansion of ChatCom's operations. James B. Mariner, President and Chief Executive Officer of ChatCom, Inc., stated, "The Company is very pleased with the terms of the financing. ChatCom remains debt free with a strong balance sheet. The transaction will provide the Company with the liquidity necessary to penetrate its target markets and concentrate on revenue growth. Additionally, we believe that this important relationship with High View will enhance ChatCom's ability to take advantage of strategic opportunities offered in the future." Andrew M. Brown, Managing Director of High View Capital, stated, "We were attracted to ChatCom's superior server technology, its opportunities in several rapidly developing markets and its prestigious international customer list." Founded in 1982, ChatCom, Inc. is a leading supplier of consolidated server A multiprocessor computer system consisting of several rack-mounted or modularized CPU boards that use fault tolerant components and share disk storage. SMP versions share a common memory pool. systems to Fortune 1000 companies. Its ChatterBox(TM) family of products has won numerous prestigious awards, including: PC Magazine's "Editor's Choice", LAN (Local Area Network) A communications network that serves users within a confined geographical area. The "clients" are the user's workstations typically running Windows, although Mac and Linux clients are also used. Magazine's "Product of the Year", and the LAN Times "Best of Times". Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Act of 1995. Except for the historical information contained herein, the matters discussed in this Press Release are forward-looking statements which involve risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting the Company's operations, markets, products and prices, and other factors discussed in the Company's various fillings with the Securities & Exchange Commission, including without limitation the Current Report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. , dated Aug. 29, 1996. CONTACT: ChatCom, Inc. James B. Mariner, 818/709-1778 or Strategic Growth International, Inc. Richard Cooper or Stanley Altuschuler, 516/829-7111 |
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