ChatCom Inc. Announces Debt Conversion Agreement with Storage Computer.CHATSWORTH, Calif.--(BUSINESS WIRE)--March 23, 1998--ChatCom Inc. (Nasdaq:CHAT) announced that it has finalized an agreenment with a subsidiary of Storage Computer Corp. (AMEX AMEX See: American Stock Exchange :SOS SOS, code letters of the international distress signal. The signal is expressed in International Morse code as … — — — … (three dots, three dashes, three dots). ) that will convert $1,345,000 of outstanding trade debt owed by ChatCom to Storage Computer into equity in ChatCom. The agreement, reached in principle in late January, provides that equity will be in the form of two convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". issues. ChatCom also granted Storage Computer warrants to purchase 285,000 shares of ChatCom common stock. ChatCom private labels Storage Computer's RAID 7 disk array systems, which when combined with ChatCom products, are marketed as a ChatCom RAINS product. Carey Walters, ChatCom's recently appointed president and chief executive officer, stated that: "We are pleased that our principal OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and partner, Storage Computer, has an equity position in the company. The conversion of the debt to equity is a significant step towards realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of our capital structure." In addition, the company is conducting discussions for additional capital that it requires for its current operations with certain existing investors and others. Founded in 1982, ChatCom is a supplier of patented, award-winning managed, consolidated application and communications server systems to the burgeoning worldwide networks arena. Located in Chatsworth, ChatCom is publicly held and traded on Nasdaq under the symbol CHAT. ChatCom can be reached at 800/456-1333, or on the Web at httt://www.jlchatcom.com. -0- 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 Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, including but not limited to economic, competitive, governmental and technological factors affecting revenues, operations, markets, products, prices and other factors discussed in the company's various filings with the Securities and Exchange Commission. CONTACT: ChatCom Inc., Chatsworth Gordon L. Almquist, 818/709-1778 galmquist@jlchatcom.com |
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