OTCBB:RSMI MDG NEW Prospects List NEWS:
Rim Semiconductor Closes $6 Million Financing; Company Also Reduces Current Liabilities by $845,000
PORTLAND, Ore.--(Business Wire)--March 13, 2006--
Rim Semiconductor Company (OTCBB:RSMI), an emerging
provider of semiconductors to the broadband telecommunications
industry, today announced that it has closed a successful $6 million
private placement of its two year 7% Senior Secured Convertible
Debentures to institutional and private investors.
Rim Semi intends to use these funds to accelerate the
commercialization of the Embarq(TM) product family, and to provide the
high-volume, low-cost ASSP semiconductor for sale. Worldwide demand
for broadband continues to soar, and the Company believes that its
product line is uniquely suited to meet it. Rim Semi's flagship
product, the Embarq(TM) E30 digital signal processor, is a
dual-function chip that combines both the long-reach and high data
rate of DSL plus the cost reduction of VoIP into one unique and
powerful package.
"Customers and trade partners are telling us that Rim Semi's
product has the highest data rates over the longest distances," Brad
Ketch, president and chief executive officer stated. "This power,
combined with the potential for our integrated VoIP to dramatically
lower cost, means to me that demand for our products is sure to be
very strong."
$810,000 of the proceeds from this private placement will repay in
full the Company's obligations under loans made in December 2005 and
January 2006. The remainder of the proceeds of this financing will be
used for increasing the engineering and marketing staffs, investing
more in research and development, incurring the expenses necessary to
have the ASSP fabricated at a chip foundry, and for general corporate
purposes, including fees and expenses relating to this transaction.
This work is intended to bring the Company closer to achieving its
first orders.
The Company also reported today that it received approximately
$570,000 in the aggregate from the exercise of warrants to purchase
Company common stock.
Further, the Company reported today that it eliminated $845,000 in
current liabilities by issuing an aggregate of 12,064,494 shares of
common stock in exchange for the cancellation of six promissory notes.
The notes were held by seven trusts which have been investors in the
Company since 2001.
"The institutional and private investors who participated in these
transactions enthusiastically and confidently support the Rim Semi
management and advisory team and their successes in bringing the
Embarq(TM) chip to market this year", stated Ray Willenberg, Jr.,
chair of the Company's board of directors. "Most of the investors have
invested previously and continue to show great confidence in the
Company and its team."
The 7% Senior Secured Convertible Debentures are secured by a lien
on Rim Semiconductor's assets. As part of this transaction, the
investors also received warrants to purchase shares of Rim
Semiconductor common stock.
$3 million of the $6 million was placed in escrow and will be
released to the Company if the Company amends its charter before April
25, 2006 to increase the number of shares of its authorized common
stock. The proposed increase has been approved by the Company's Board
of Directors and is being submitted to a vote of the Company's
shareholders at the 2006 annual meeting to be held on April 18, 2006.
Additional information relating to the Senior Secured Convertible
Debentures, the warrants and the repayment of the above loans is
included in Rim Semiconductor's Current Report on Form 8-K.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale
would be unlawful prior to the registration or qualification under the
securities laws of any such state.
Copyright Business Wire 2006
13Mar06 11:00 GMT
Symbols:
de;NV2 us;RSMI
Source BW Business Wire
