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WorldGate Raises $7.1 Million for Videophone Roll OutWorks with Motorola to roll out the Ojo Personal Videophone at 2005 CES (February 10, 2005)
Motorola Ojo Personal Videophone
Included in the $7.1 million was $4.7 million of cash generated from the exercise of additional investment rights (designated as Series C warrants) included as part of WorldGate's June 23, 2004 private placement with certain institutional investors. These additional investment rights provided, for a two-month period, for the purchase of the Company's common shares at $3.14 per share. Additional cash of $1.1 million was generated from the exercise of warrants included as part of the Company's December 2003, January 2004 and June 2004 private placements with certain institutional investors. The exercise of the additional investment rights and the warrants noted above resulted in the issuance of approximately 2,315,000 additional common shares.
In addition, the Company received approximately $800,000 in gross proceeds from the exercise of approximately 332,000 employee stock options by non-executive employees and former employees. These options were exercised at various exercise prices equal to the closing price on the date on which the options were granted.
On December 18, 2004 the Company also entered into a subscription agreement with a private investor, K.Y. Chou, president of Mototech in Taiwan, for the purchase of 208,333 shares of newly issued shares of common stock at $2.40 resulting in gross proceeds to the Company of $500,000. The investor also received five year warrants to purchase 62,500 shares of common stock at $2.88 as part of this private placement.
With the additional cash raised through these investments as well as the cash expected to be generated by initiation of shipment of Ojo videophones expected to begin in the first quarter of 2005, the Company believes that it has the funding necessary to support Ojo Videophone's entry into the marketplace.
"We are pleased to have raised additional capital as WorldGate proceeds with several strategic initiatives in 2005," commented Hal Krisbergh, WorldGate's CEO. "This year will mark the first year of retail availability for Ojo videophones, and we look forward to forging ahead."
Successful CES 2005 Debut The raising of this additional capital comes during the same period as the extremely successful rollout of the Motorola Ojo Personal Videophone at the 2005 CES, one of the world's largest annual consumer technology shows held January 6-9 in Las Vegas. A steady flow of attendees and press enjoyed live demonstrations of Ojo videophones transmitting full-motion video with synchronized audio over a broadband Internet connection, redefining personal communications before their very eyes.
Ojo was honored with a CES "Best of Innovations" Award after impressing a panel of independent industrial designers, engineers, and members of the trade press who judged this year's entries for International CES's 2005 Innovations in Design and Engineering Awards, the annual honor for "innovation that tops all innovation".
As part of the CES debut of Ojo, Motorola also launched The Motorola Ojo WINMEMOTO Sweepstakes, offering CES attendees and radio listeners in twenty cities nationwide a chance to win a Motorola Ojo Personal Videophone.
"We couldn't be more pleased with the excitement for Ojo among CES visitors and the media," says Krisbergh. "WorldGate is thrilled to be working with Motorola, a global leader designing personal communications devices, in bringing this technology to market."
Motorola and WorldGate expect to begin selling Ojo videophones to consumers in spring of 2005.
About WorldGate Communications, Inc.
WorldGate is in the business of developing, designing and manufacturing video phones for personal and business use, to be marketed with the Ojo brand name. The Ojo video phone is designed to conform to industry standard protocols, and utilizes proprietary enhancements to the latest technology for voice and video compression. Ojo video phones are designed to operate on the high speed data infrastructures provided by cable and DSL providers. WorldGate has applied for patent protection for its unique technology and techno-futuristic design that contribute to the functionality and consumer appeal offered by the Ojo video phone. This unique combination of design, technology and availability of broadband networks allow for real life video communication experiences that are now, for the first time, economically and technically viable.
More information on WorldGate and the Ojo personal video phone can be accessed at www.WGate.com. WorldGate is traded on NASDAQ under the symbol WGAT. WorldGate and Ojo are trademarks of WorldGate Service Inc.
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