Centura's CEO letter to shareholder:
centurasoft.com
January 3, 2000
Dear Shareholder,
I am pleased to inform you that Centura has recently completed a new round of equity
financing of $12.5 million with a "first tier" Wall Street financial institution; Ramius Capital
Partners, LLC. The form of financing is a Company directed preferred at a ceiling strike price
of $5.82 per share. The proceeds will go toward accelerating our plans to be the market
leader in B2B Software Solutions for the eBusiness and Information Appliance markets. Our
goal is to extend the enterprise out to handheld and intelligent computing devices, and to
do so both dynamically and securely.
A business deals with two forms of risk: financing risk and operating (strategic) risk. With
the acquisition of our $12.5 million preferred equity, we have materially reduced our
financing risk profile. There are two effects:
An increase in management's ability to make strategic choices that have a
longer-term horizon, and
A deeper capital structure, necessary in the event unforeseen circumstances arise.
We have had plans to raise additional equity capital for a long time. The recent increase in
our market valuation presented us with a number of opportunities to accelerate these
plans. This "Company Directed Preferred Equity" infusion is the best option with the least
dilution for existing shareholders. In fact, we were able to raise this capital for only about
5.7% of the total shares outstanding. Our partner in this equity round is Ramius Capital
Partners, LLC, out of New York. The benefit of the Preferred is that the strike price is higher
than it otherwise would be in a straight common equity round. The benefit of the "Company
Directed" aspect of the offering is that management makes the determination when to
convert the preferred shares to common shares. At present, we know of no shareholder or
shareholder group, including Ramius, that owns greater than a 5.7 % interest in Centura's
common stock.
Our strategy continues to be about dynamically and securely extending business
information out to handheld and intelligent computing devices. It is about leveraging
knowledge and making faster, better decisions for our customer's customers.
The impact of the financing on our operating plans is to accelerate specific investments. This
will help us gain early market acceptance as leaders in this market - the 5th Wave.
Accordingly, we are setting up a new operating division to focus on capturing new
customers, in targeted market niches, that will likely be the earlier adopters in our markets.
Our intent is twofold: 1) Invest a portion of the proceeds on market development, through
our new Strategic Business Units, and 2) increase our activities in porting our software,
eSNAPP and RDM, to support multiple appliance and handheld OS platforms: Linux, Palm,
VxWorks, and Windows CE. Our object is that our efforts result in faster growth and a
significant improvement in shareholder value.
We look forward to a successful year 2000 and are pleased that we can begin the year with
a solid market strategy, strong positioning and fueled for worldwide growth and leadership.
All Success and Happy New Year!
Sincerely,
Scott Broomfield
Chairman and CEO |
