Acceleware Corp. to Complete Private Placement; Provides Financial and Operational Update
CALGARY, ALBERTA, Dec 10, 2008: Acceleware Corp. ("Acceleware" or the "Company") (AXE) today announced that it intends to complete a non-brokered private placement of up to 8,000,000 common shares ("Common Shares") at a price of $0.05 per share for gross proceeds of up to $400,000. It is expected that employees, officers, directors and insiders of the Company will participate in and take up a significant portion of the private placement. The completion of the private placement is subject to TSX Venture Exchange approval and other regulatory approval. Proceeds of the private placement will be used for general corporate purposes and to increase Acceleware's working capital.
The board of directors and management continue to focus on maintaining adequate working capital. It is anticipated that the proceeds of the current offering, when combined with cash from operations and a $500,000 receivables line of credit with Export Development Canada, will provide the Company with sufficient funds to sustain its business operations.
In addition to announcing the private placement, Acceleware also wishes to provide an update on its restructuring efforts, current financial situation and operational plans going forward into 2009. Acceleware undertook a major restructuring of its operations at the end of July 2008 following its decision, precipitated by market conditions, not to continue with the short form prospectus offering (announced in mid-July). To preserve capital and limit expenditures, Acceleware reduced the number of personnel to approximately 40 employees.
Since July, expenditures on inventory, salaries, marketing, corporate overhead and support and research and development have been significantly reduced and the Company has re-focused its efforts on its most mature vertical markets: electronics and oil and gas. All development work on new vertical markets has been halted. Significant efforts have been made to reduce existing product inventory and ongoing operational costs have continued to fall. Meanwhile, legacy costs continue to be partially or wholly recovered (as in the case of past purchases of inventory) or paid down (as in the case of the July 2008 restructuring costs, including the costs associated with not proceeding with the Company's proposed equity offering in July).
As part of a significant strategic re-alignment of its business operations, Acceleware has informed its product channel partners that it is moving to a software-only sales model in 2009 and will not be maintaining equipment inventory for combined sales of hardware and software once existing hardware inventories are used up. The Company has also introduced a new pricing schedule which better reflects the significant improvements achieved in delivering accelerated (and in some cases, markedly accelerated) computing performance in successive generations of its products. The new pricing schedule, incorporating a much lower unit cost of sales (and, hence, a proportionately greater contribution to the Company's earnings), will be launched in the first quarter of 2009. In addition to relying on its existing channel partners, the Company is actively pursuing new channel partners and alternative revenue streams, including professional services agreements with key customers (some of which have already started), with a view to improving financial performance.
The Company has also taken important steps to operationally align itself more closely with NVIDIA, its principal hardware technology provider. Acceleware has made significant progress in introducing NVIDIA's new hardware programming language (CUDA) in its products and was one of the earliest adopters of NVIDIA's Tesla GPU computing technology, the latter of which constitutes a vital platform for Acceleware's software.
Acceleware Interim CEO, Dr. Michal Okoniewski, stated, "We are confident that the restructuring we undertook this past summer, together with the major steps we have taken since then, are the right ones for the Company. We have reduced costs, stabilized our operations, intensified our focus on what we do best, re-defined our sales model to dispense with the need for costly inventory management, increased prices to better reflect the value our products deliver, begun pursuing alternative recurring revenue streams and aligned ourselves more closely technologically with our strategic partner, NVIDIA. Taken together with the private placement we announced today, I believe these measures have placed the Company on a path to commercial and financial viability."
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The offered securities mentioned in this press release will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act.
This new release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed private placement and has neither approved nor disapproved the contents of this press release.
Acceleware develops and markets solutions that enable software vendors to leverage heterogeneous, multi-core processing hardware without rewriting their applications for parallel computing. This acceleration middleware allows customers to speed-up simulation and data processing algorithms, benefiting from high performance computing technologies available in the market such as multiple-core CPUs, GPUs or other acceleration hardware.
Acceleware solutions are deployed by companies worldwide such as Philips, Boston Scientific, Samsung, Eli Lilly, General Mills, Nokia, LG, RIM, Medtronic, Hitachi, Fujifilm, FDA, Mitsubishi, Sony Ericsson, AGC, NTT DoCoMo, and Renault to speed up product design, analyze data and make better business decisions in areas such as electronic manufacturing, oil & gas, medical and security imaging, industrial and consumer products, financial, and academic research. For more information about Acceleware, please visit www.acceleware.com.
Acceleware is a public company on Canada's TSX Venture Exchange under the trading symbol AXE.
Forward Looking Information & Safe Harbour Statement
Certain statements in this release, other than statements of historical fact, may include forward-looking information that involves various risks and uncertainties. These may include, without limitation, statements based on current expectations involving a number of risks and uncertainties related to all aspects of the high performance computing industry. These uncertainties may cause actual results to differ from information contained herein. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward-looking statements are based on the estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. The Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.