TeraGlobal Communications Raises $4 Million in Equity Funding; Principal Investor WallerSutton 2000, L.P. to Provide Future Funding of $2 Million.Business Editors SAN DIEGO--(BUSINESS WIRE)--July 3, 2001 TeraGlobal Communications Corp. (Nasdaq:TGCC TGCC Transview Golf & Country Club (Singapore) ) ("TeraGlobal" or the "Company") today announced that it has received $4 million in funding from a private transaction. The investment is led by WallerSutton 2000, L.P. ("WallerSutton"), a private investment fund specializing in the media and telecommunications industries. WallerSutton has also committed to fund an additional $2 million upon TeraGlobal's attainment of certain performance milestones. The Company, which had announced the need for additional capital during the second quarter of 2001, secured $1.5 million of bridge financing Bridge Financing A method of financing, used by companies before their IPO, to obtain necessary cash for the maintenance of operations. Notes: These funds are usually supplied by the investment bank underwriting the new issue. through a private offering of convertible promissory notes in June. Investors in the bridge round included WallerSutton, Spencer Trask Spencer Trask was an American financier, philanthropist, and venture capitalist. Beginning in the 1870s, Trask began investing and supporting entrepreneurs, including Thomas Edison's invention of the electric light bulb. & Co., members of the Company's Board of Directors and other outside investors. TeraGlobal closed the permanent financing Permanent financing Long-term financing using either debt or equity. permanent financing The long-term financing that supports a long-term asset. transaction with WallerSutton following shareholder approval at the Company's annual meeting of shareholders, held on June 27. In connection with the closing, WallerSutton purchased $2.5 million of Series A 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". and warrants to purchase Common Stock. Effective on the close of the transaction, the convertible promissory notes issued in the bridge financing automatically converted to 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. and warrants. "WallerSutton and Spencer Trask are bringing more than just needed capital," said Bob Randall, TeraGlobal's 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. . "They provide strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. and critical business review, as well as access to industry participants, potential customers and market relationships." "We remain convinced of the value of our products and our approach to the market," said Randall. "This is 'smart' money which has been placed only after extensive technical, management, and market opportunity due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. . It also provides us with the capital needed to finance development and aggressively pursue revenue opportunities -- both large scale partnerships and market channels as well as end user sales." "TeraGlobal is in an emerging space with a unique product offering," said Jim Crabtree, Managing Director of WallerSutton. "The Company's networking software  This article is written like a personal reflection or and may require .Please [ improve this article] by rewriting this article in an . provides a platform for advanced communications applications over broadband networks  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. ." In all, the Company issued an aggregate of 7,468,601 shares of Preferred Stock in the financing transaction at an effective price of $0.536 per share. The Preferred Stock bears an 8 percent dividend. It is convertible into Common Stock on a one-for-one basis, subject to certain anti-dilution protection. WallerSutton has the right to appoint two members to the Company's board of directors and approve major transactions, such as mergers, combinations or the sale of substantially all of the Company's assets. The Company also issued an aggregate of 3,999,094 common stock purchase warrants with an exercise price of $0.536 per share; 599,962 warrants with an exercise price of $1.00 per share; and 599,962 warrants with an exercise price of $1.50 per share. The warrants each have a six year term. Upon closing this initial phase of the Preferred Stock financing transaction, WallerSutton owns approximately 20 percent of the Company's outstanding voting securities on a fully diluted basis, assuming exercise of all outstanding warrants and options. About WallerSutton 2000, L.P. WallerSutton 2000, L.P. is a private equity fund focused on early-to-mid-stage investments within the media and telecommunications industries. WallerSutton seeks to leverage its network of relationships as well as its principals' operating and financial expertise to help management teams build successful companies and generate significant long-term capital appreciation for the Fund's investors. WallerSutton is a continuation of the collaboration among the principals of Waller Capital Corp., a leading telecommunications investment bank, and Sutton Capital Associates, a successful owner and operator of telecommunications businesses. About Spencer Trask & Co. Spencer Trask & Co. is a leader in transforming bright ideas into world-changing companies in partnership with value-added investors. The firm is known for financing leaders within the software, telecommunications and healthcare industries. About TeraGlobal Communications TeraGlobal Communications develops Advanced Networking Software. Their TeraMedia software is a real-time integrated voice, video and data collaboration See data conferencing. solution being sold to the education, corporate, media and government markets. TeraGlobal's patent-pending network technology and software solutions provide one of the networking industry's first guaranteed Quality of Service or Class of Service for delivering simultaneous voice, video and data on integrated broadband networks. Founded in 1998, TeraGlobal is headquartered in San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. with development offices in Logan, Utah Logan is a city in Cache County, Utah, in the United States. As of the 2000 census, the city population was 42,670, a substantial increase over the 1990 figure of 32,771. The estimated population in 2006 had increased to 47,660. . Additional information is available at http://www.teraglobal.com or by sending an e-mail inquiry to info@teraglobal.com. TeraGlobal and TeraMedia are registered trademarks of TeraGlobal Communications Corp. Other trademarks are properties of their respective owners. Certain matters discussed in this press release may contain forward-looking statements that may involve risk and uncertainties, including but not limited to, product availability and delivery dates, market acceptance of products and services, as well as other factors detailed in the Company's filings with the Securities and Exchange Commission. |
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