Osicom Technologies Announces Plan To Unlock Value Of Its Sorrento Networks Subsidiary.Business Editors SANTA MONICA Santa Monica (săn`tə mŏn`ĭkə), city (1990 pop. 86,905), Los Angeles co., S Calif., on Santa Monica Bay; inc. 1886. Tourism and retailing are important, and the city has motion-picture, biotechnology, and software industries. , Calif.--(BUSINESS WIRE)--Sept. 5, 2000 Plan would give Sorrento public company status with the intent to minimize tax consequences to shareholders Osicom Technologies, Inc. (Nasdaq:FIBR FIBR Forward Indicator Bit Received ) today announced a significant step in its continuing efforts to unlock shareholder value. When complete, the Company's plan would give independent, public company status to Sorrento Networks, its largest subsidiary, and provide recognition to Sorrento as the Company's flagship operating asset. Sorrento is the networking equipment industry's pioneering provider of next-generation optical solutions for metropolitan applications. This follows the completion of the merger between Osicom subsidiary Entrada Networks, Inc. (Nasdaq:ESAN ESAN Escuela de Administración de Negocios Para Graduados (graduate school of business in Lima, Peru) ESAN Embedded System Area Network ) with Sync Research, Inc. on August 30, 2000, and the successful IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. of NetSilicon, Inc. (Nasdaq:NSIL) in September 1999. It is also contemplated that, subject to shareholder approval, the name of Osicom Technologies, Inc. will be formally changed to Sorrento Networks, Inc. at the forthcoming annual shareholders meeting, and the shares of "new" Sorrento will trade on the Nasdaq National Market under the symbol SRTO SRTO Sender Retransmission Time-Out . The plan would significantly increase the cash and cash equivalents available to Sorrento to fund operations. In addition, the plan is intended to minimize tax consequences to the Company and its shareholders. Osicom's Chairman, Rohit Phansalkar, explained that the just-announced plan was designed to maximize shareholder ownership of Sorrento Networks: "Over the past year, we have been focused on unlocking the value inherent in Sorrento Networks for the benefit of all our shareholders. Several options were considered, including an IPO of Sorrento stock. Following the creation of a liquid market for Sorrento securities by means of an IPO, the Sorrento shares owned by Osicom would have been distributed to our shareholders." Continued Osicom's Phansalkar, "Even under the most favorable IPO and distribution scenarios presented to us by investment bankers, however, Osicom was expected to experience a significant taxable event Taxable event An event or transaction that has a tax consequence, such as the sale of stock holding that is subject to capital gains taxes. at the time of the distribution. This would have required us to liquidate To pay and settle the amount of a debt; to convert assets to cash; to aggregate the assets of an insolvent enterprise and calculate its liabilities in order to settle with the debtors and the creditors and apportion the remaining assets, if any, among the stockholders or owners of the a large number of those shares, in order to meet the corporate tax obligation. As a result, our shareholders would have received only a fraction of Sorrento's value. A further consideration was the fact that such a distribution was likely to have caused new personal income tax obligations for our shareholders individually." Sorrento's Chairman, Dr. Xin Cheng, added, "Under the plan we have just announced, Sorrento Networks will become an independent, pure-play company in its market space without having incurred any new tax obligations. In addition, shareholders of record will receive, via a distribution within the coming weeks, significant ownership of Entrada Networks." Pursuant to this plan, three of the independent directors of Sorrento have agreed to join the board of the Company. They are Gregory Grodhaus, president of INRANGE Technologies Corporation, Dr. Tingye Li Dr. Tingye Li (Traditional Chinese: 厲鼎毅; Simplified Chinese: 厉鼎毅; Pinyin: Lì Dǐngyì , past head of the Lightwave Networks Research Department of AT&T Research at Crawford Hill Crawford Hill (40 23' 28" N, 74 11'07" W) is located in Holmdel Township, New Jersey. It is Monmouth County's highest point, standing at least 380 feet (116 m) above sea level. Laboratory, and Dr. Rajendra Singh This page is about the winner of the Magsaysay Award. For the fourth sarsanghchalak of the RSS, go here. Rajendra Singh is a well known water conservationist from Alwar, Rajasthan in India. , Chief Executive Officer of Telecom Ventures, L.L.C. They will join continuing Osicom directors Rohit Phansalkar, former managing director of Oppenheimer & Co., Leonard Hecht, co-founder of Xerox Development Corporation, and Dr. Xin Cheng, founder of Sorrento Networks. The Company also intends to name one or more additional independent directors in the near future. Current Osicom directors Dr. Davinder Sethi and Dr. Renn Zaphiropoulos have agreed to continue as advisors to the Company. In combining the management of the two companies, Dr. Cheng will be Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of the combined entities. Sorrento's current President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , Oren G. Shaffer, has relinquished his management positions and will become an advisor to the Company. Rohit Phansalkar, current Chairman and CEO of Osicom, also has relinquished his management roles, and will serve only as a director. The Company also announced that it has retained the investment banking firm of SG Cowen Securities Corporation to act as financial advisor to the Company in connection with potential actions that might be undertaken as the Company seeks to enhance shareholder value. The Company announced further that it still intends to distribute to shareholders at a later date, subject to the funding requirements of Sorrento, a portion of the common stock it owns in former subsidiary NetSilicon, Inc., which shares have a current market value of approximately $175 million. Until such distribution, if any, the Company's holdings in NetSilicon will remain a current asset on the balance sheet of "new" Sorrento Networks, and would be available, if necessary, to fund Sorrento's operations over the near term. The Company announced, in addition, that it plans to file a proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. within 30 days in order to obtain shareholder authorization for the change of its name and such other matters as may require shareholder approval. During the next few weeks, the Company also plans to make details available to shareholders and the public regarding the steps necessary to implement the initiatives announced today in a manner that will preserve the benefits currently enjoyed by Sorrento's highly skilled employees and its preferred shareholders. A conference call with analysts will be held later today to discuss these and other matters. A separate announcement will follow with details of the call. About Osicom Technologies Osicom Technologies Inc. is a developer and marketer of metropolitan optical networking Communications between computers, telephones and other electronic devices using light. An optical network is far more reliable and has far greater potential transmission capacity than networking in the electrical domain. See optical fiber. systems, through its optical networking subsidiary Sorrento Networks, and optical and other next generation storage area networking technologies, through its Entrada Networks subsidiary. For more information about Osicom Technologies, visit www.osicom.com. About Sorrento Networks Sorrento Networks has been a provider of all optical networking solutions that are used in both interoffice in·ter·of·fice adj. Transmitted or taking place between offices, especially those of a single organization: an interoffice memo; interoffice conferences. and access networks since 1997. Sorrento Networks, Inc. products are successfully deployed at numerous customer sites in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe and Asia. Sorrento Networks' products are specifically designed to meet the requirements of the Metropolitan market, supporting a wide variety of protocols, network traffic speeds and changing traffic patterns. Sorrento Network's products' small footprint allows service providers to offer a wide variety of services from the same platform including aggregation, transport, switching and management. Sorrento's ultra scalable carrier class products are manufactured to meet all key industry certifications. These products offer customers an optical end-to-end solution (jargon) end-to-end solution - (E2ES) A term that suggests that the supplier of an application program or system will provide all the hardware and/or software components and resouces to meet the customer's requirement and no other supplier need be involved. Compare: turn-key solution. that improves bandwidth utilization and reduces network costs and complexity. The products provide a migration path from ring and point-to-point topologies to the mesh architecture of next generation networks. Sorrento Networks is headquartered in San Diego, California “San Diego” redirects here. For other uses, see San Diego (disambiguation). San Diego is a coastal Southern California city located in the southwestern corner of the continental United States. As of 2006, the city has a population of 1,256,951. . Recent news releases and additional information about Sorrento Networks can be found at www.sorrentonet.com. About Entrada Networks and NETsilicon Entrada Networks, Inc., is the Company's subsidiary specializing in the design of optical and other next-generation storage area networking technologies. Entrada completed its merger with Sync Research, Inc. on August 30, 2000. Shares of the combined entity, known as Entrada Networks, Inc., trade on the Nasdaq National Market under the symbol ESAN. NETsilicon (Nasdaq:NSIL) is a market-leading maker of networking systems-on-silicon, of whose common stock Osicom Technologies, Inc. currently owns 7,500,000 shares. Except for historical information contained herein, the matters discussed in this release are forward-looking statements that involve risks and uncertainties. Words such as "plans," "expects," "intends," and variations of such words and similar expressions are intended to identify such forward-looking statements. The forward-looking statements in this release are made pursuant to the 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. provisions of 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. The occurrence of actual events may differ materially due to a variety of factors, including without limitation the following: (1) unanticipated technical problems relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Company's products; (2) the Company's ability, or lack thereof, to make, market and sell optical networking products that meet with market approval and acceptance; (3) the greater financial, technical and other resources of the Company's many, larger competitors in the marketplace for optical networking products; (4) changed market conditions, new business opportunities or other factors that might affect the Company's decisions as to the best interests of its shareholders; and (5) other risks detailed from time to time in the Company's reports filed with the U.S. Securities and Exchange Commission. |
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