Company Secures New Capital and Successfully Works With Motorola to Roll Out
the Ojo(TM) Personal Video Phone at 2005 CES
TREVOSE, Pa., Feb. 7 /PRNewswire-FirstCall/ -- WorldGate Communications
Inc. (Nasdaq: WGAT) today announced that over the last two months the Company
has successfully introduced its Ojo personal video phone at the 2005
International Consumer Electronics Show (CES) and received cash proceeds of
$7.1 million from A) the exercise of outstanding warrants by existing
institutional investors, B) the exercise of non-executive employee and prior
employee stock options, and C) the private placement of Company stock.
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 video phones
expected to begin in the first quarter of 2005, the Company believes that it
has the funding necessary to support Ojo Video Phone'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 video phones, 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 Video Phone 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 video phones 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 Video Phone.
"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 video phones to
consumers in spring of 2005.
For more information or to view some of the CES media coverage please
visit the companies online at http://www.WGate.com or
http://motorola.com/ojo/.
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 http://www.WGate.com. WorldGate is traded on NASDAQ
under the symbol WGAT. WorldGate and Ojo are trademarks of WorldGate Service
Inc.
This press release may contain forward-looking statements that are made
pursuant to the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. Expressions of future goals and similar expressions
including, without limitation, expressions using the terminology "may,"
"will," "believes," "plans," "expects," "anticipates," "predicts,"
"forecasts," and expressions which otherwise reflect something other than
historical fact are intended to identify forward-looking statements. These
forward-looking statements involve a number of risks and uncertainties,
including the timely development and market acceptance of products and
technologies, the ability to fund operations or raise additional capital if
needed and the other factors described in the Company's filings with the
Securities and Exchange Commission. The actual results may differ materially
from any forward-looking statements due to such risks and uncertainties. No
obligation is undertaken to revise or update any forward-looking statements in
order to reflect events or circumstances that may arise after the date of this
release.
SOURCE WorldGate Communications Inc.
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Related links:
http://www.WGate.com
CONTACT:
Media Contact: Tim Cifelli of Gregory FCA
Communications, +1-610-642-8253, for WorldGate Communications; or
Investor Contact: Joel Boyarski of WorldGate Communications,
+1-215-354-5312
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