FREEHOLD, N.J., July 21 /PRNewswire-FirstCall/ -- Speedus
Corp. ("Speedus") (Nasdaq: SPDE) today announced that it has
entered into a Letter of Intent ("the Agreement") with Dubai-based Hye Mar Holdings Ltd. ("HMH") for
an equity investment into Speedus of $4.0
million. Under the terms set forth in the Agreement, HMH has
the right to purchase non-voting Series A Convertible Preferred
Stock, which is convertible into approximately 1.84 million
newly-issued common shares in Speedus with a fixed, non-adjustable
conversion price of $2.17 per share
(subject to an ownership limit such that HMH may not hold more than
9.9% of the Company's total shares outstanding at any point in
time). The Agreement also provides for HMH to obtain exclusive
distribution rights in the Middle
East and North Africa for
certain products manufactured by Speedus subsidiaries Zargis
Medical Corp. (Zargis) and Density Dynamics Corp. (Density). No
additional warrants for shares will be issued in this transaction
and no related investment banking fees will be incurred.
Subject to closing occurring on or before July 27, 2010, the transaction contemplated in
the Agreement will allow Speedus to regain compliance with NASDAQ
Listing Rule 5550, which requires that the Company maintain at
least $2.5 million in stockholders'
equity.
When asked to comment on the proposed investment, Shant Hovnanian, Chief Executive Officer of
Speedus Corp., stated, "I am very excited to have found an equity
investor with demonstrated success in marketing and distributing
technology products in the Middle
East and North Africa. Not
only will this investment allow Speedus to maintain its NASDAQ
listing, subject to NASDAQ approval, but the distribution
agreement, combined with other developing partnerships, will help
our Zargis and Density subsidiaries accelerate global sales."
The Agreement outlines requirements for additional due diligence
and closing conditions, including execution of a stock purchase
agreement and product distribution agreements, that must be
completed by HMH and Speedus before the two companies can close the
financing. The parties have targeted a closing date of not later
than July 27, 2010.
Notwithstanding the foregoing, there can be no assurance that
closing of the financing will occur on or before July 27, 2010, which is the Company's NASDAQ
compliance deadline, or that NASDAQ will allow Speedus to retain
its NASDAQ listing.
About Zargis Medical Corp.
Zargis is a global medical device company focused on improving
health outcomes and cost-effectiveness through diagnostic support
software and innovation. Zargis is majority-owned by Speedus Corp.
(Nasdaq: SPDE), and both 3M Company and Siemens Corporate Research,
a division of Siemens AG (NYSE: SI), hold equity positions. Zargis
can be found on the web at www.zargis.com.
About Density Dynamics
Density Dynamics, a majority owned subsidiary of Speedus Corp.,
is a pioneer in solid-state I/O acceleration technology. Its
extreme performance Jet.io™ Accelerator DRAM based Solid State
Drives and computing devices are designed to reduce I/O bottlenecks
while also reducing power, cooling, and rack space requirements.
Density Dynamics can be found on the web at
www.densitydynamics.com.
About Speedus Corp.
Additional information on Speedus Corp. may be obtained at
www.speedus.com or by contacting Peter
Hodge at 888-773-3669 (ext. 23) or phodge@speedus.com.
Statements contained herein that are not historical facts,
including but not limited to statements about the Company's
product, corporate identity and focus, may be forward-looking
statements that are subject to a variety of risks and
uncertainties. There are a number of important factors that could
cause actual results to differ materially from those expressed in
any forward-looking statements made by the Company, including, but
not limited to, the continuing development of the Company's sales,
marketing and support efforts. The use of any of the words "could",
"intend", "expect", "believe", "will", "projected", "estimated" and
similar expressions and statements relating to matters that are not
historical facts are intended to identify forward-looking
information and are based on the Company's current belief or
assumptions as to the outcome and timing of such future events.
Actual future results may differ materially. In particular, this
release contains forward-looking information relating to the
intention of the parties to enter into these agreements. The
Company cautions the reader that the above list of risk factors is
not exhaustive. The forward-looking information contained in this
release is made as of the date hereof and the Company is not
obligated to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise,
except as required by applicable securities laws. Because of the
risks, uncertainties and assumptions contained herein, investors
should not place undue reliance on forward-looking information. The
foregoing statements expressly qualify any forward-looking
information contained herein.
Completion of the transaction is subject to a number of
conditions. There can be no assurance that the transaction will be
completed as proposed or at all.
SOURCE Speedus Corp.
