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Technology Stocks : STARBASE (SBAS)- InfoWorld Hot Product Review -- Ignore unavailable to you. Want to Upgrade?

To: Roy F who wrote (1469)	5/23/2002 9:44:56 AM
From: Roy F	Respond to of 1502

Starbase Provides Turnaround Update; Announcing $12 Million Financing and a 1:10 Reverse Split SANTA ANA, Calif., May 23 /PRNewswire-FirstCall/ -- Starbase Corporation (Nasdaq: SBAS - News), Starbase Corporation is a leading provider of enterprise application management solutions designed to speed the software development lifecycle, today provided an update regarding the Company's turnaround efforts. The Company announced it has entered into agreements to complete an equity financing for approximately $12 million through the sale of convertible preferred stock to institutional investors in a private placement. In addition, the Company has also announced plans to effect a 1:10 reverse split of its common stock. Both transactions have been unanimously approved by the Starbase Board of Directors. Shareholder approval is necessary for both transactions and a meeting is expected to take place in mid-July 2002. Upon completion of the reverse split, the preferred stock will automatically convert into common stock. The proceeds of the financing will be used for working capital and to support sales of the company's products to its customers. Jim Harrer, president and chief executive officer of Starbase commented, "Both of these actions, the financing and the reverse split, are important steps in Starbase's ongoing turnaround. The private placement will further strengthen Starbase's balance sheet and provide us with an extremely solid financial position as we work toward profitability. Equally important, the credibility of these notable institutional investors is a real testament to investor confidence in our business plan moving forward. Today's actions send a clear message to our customers, prospects and competitors that we have the financial strength to see us to profitability and beyond." In connection with the financing, the Company will issue preferred stock, which is convertible into a range between 4.8 and 6.0 million shares (post reverse split) of the Company's common stock at a price between $2.00 and $2.50 (post reverse split). In addition, investors will receive 5-year warrants to purchase approximately 2.4 million shares of the Company's common stock at an exercise price of $2.50 (post reverse split). Starbase has agreed to register for resale the shares of common stock issuable upon the conversion of the preferred stock and the exercise of the warrants. The Company has agreed to promptly file a proxy statement with the Securities and Exchange Commission detailing all of the terms regarding the proposed financing and seeking approval for both transactions. The financing is contingent on the consummation of the reverse split. The lead investor for the proposed equity investment is Special Situation Funds, a widely regarded leader in discovering and investing in undervalued and underfollowed public companies with solid growth prospects. Special Situations Funds is a new investor to Starbase. The reverse split, once approved, will automatically convert each ten shares of the Company's outstanding common stock into one share. In addition, the number of shares of common stock subject to warrants, options and conversion rights will be reduced by a factor of ten. The applicable exercise and conversion price will increase by a factor of ten. A resale registration statement relating to any future resales of the shares of the Company's common stock to be issued in the financing will be filed with the Securities and Exchange Commission (SEC). These shares may not be sold nor may offers to buy be accepted prior to the time that the registration statement becomes effective. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the shares of the Company's common stock 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. Any offering of the company's shares of common stock under the resale registration statement will be made only by means of a prospectus. Recent highlights surrounding Starbase's reorganization and ongoing turnaround that began in January 2002 under the Company's new management and Jim Harrer's leadership include: -- The Board appointed Jim Harrer as Starbase's new Chief Executive Officer to lead Starbase through its reorganization. Shortly following his appointment, Harrer expanded and deepened Starbase's senior executive team with the addition of an executive vice president of engineering; an executive vice president of marketing and an executive vice president of worldwide customer support; -- The election of John Snedegar, president and Chief Executive Officer of Micro General and member of the Starbase Board of Directors, as Chairman of the Company's Board; -- The implementation of a corporate wide restructuring and cost reduction initiative to improve operating efficiency and streamline reporting structures, accelerating the timeframe to profitability and positive cash flow; -- The reduction of approximately $2.5 million in payables via a program designed to reduce certain liabilities by offering selected vendors Starbase common stock in lieu of cash payments; -- The successful negotiation for an early termination of a long-term lease, contributing to an overall savings of approximately $9.8 million over the remaining term of the lease. About Starbase Starbase Corporation provides enterprise management solutions that address the full software development lifecycle. The company leverages its enterprise software solutions and key partnerships with established industry leaders to deliver an end-to-end management solution. The combined approach of leading technology, best-fit solutions and professional implementation services enables Starbase customers to speed the application development process, resulting in improved bottom-line performance. More than 4,000 customers, including AIG, CAE and Hutchison 3G and have embraced the Starbase solutions and services methodology to meet their business objectives. For more information about Starbase and its 11 year history, please visit the company's website at www.starbase.com . Forward Looking Statements When used in the preceding discussion, the words "believes, expects, or intend to" and similar conditional expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, (i) conditions in the general economy or the software industry, (ii) the timely development and market acceptance of products and technologies, (iii) competitive factors, (iv) demand for team productivity software products, (v) sell-through of products in the sales channel, and (vi) other risks described in Starbase Corporation's SEC reports and filings. SOURCE: Starbase Corporation