WorldGate Raises $17.5M More

WorldGate Communications completes a private placement of $17.5 million of its common stock and warrants with several institutional investors

August 4, 2005

1 Min Read

TREVOSE, Pa. -- WorldGate Communications, Inc. (NASDAQ:WGAT) today announced the completion of a private placement of $17.5 million of its common stock and warrants with several institutional investors. The financing was led by funds managed by Satellite Asset Management, LP a private investment fund, which also led the Company's prior round of financing in June, 2004. SG Cowen & Co., LLC served as exclusive placement agent for the transaction.

The proceeds of the financing are expected to allow the Company to expand its research and development efforts to broaden the Company's line of Ojo video phone products, and to provide additional working capital.

Ojo is the first true-to-life video phone that provides jitter-free video, perfectly synchronized audio and video, with a stylish design, and all the features people want in a video phone such as video messaging and a cordless handset. Ojo works with broadband cable and DSL Internet connections.

"Today's funding represents a significant development for WorldGate," says Hal Krisbergh, WorldGate Chairman and Chief Executive Officer. "Now, with this funding, we have solidified our financial flexibility and capacity to continue the R&D effort, make further advancements in the promise of video telephony, and greatly improve our competitive positioning."

As part of the transaction, WorldGate issued 4,666,664 shares of its common stock at $3.75 per share to the participating investors. WorldGate also issued five-year warrants to purchase a total of 1,633,333 shares of WorldGate common stock, with an exercise price of $5.00 per share. The investors also received an additional investment right, for a limited period of time, to purchase 1,554,000 additional common stock shares at $4.12 a share.

WorldGate Communications Inc.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like