InfoNow Press Release
INFONOW SECURES $6 MILLION IN SERIES A VENTURE FINANCING
Funding to fuel faster delivery on SaaS channel data services product roadmap
Denver, October 18, 2007
InfoNow Corporation, the leading provider of SaaS-based channel data services, today announced the closing of $6 million dollars in Series A funding. Sequel Venture Partners and Sevin Rosen Funds led the financing. InfoNow intends to utilize the proceeds from the financing to further invest in product development, marketing and sales activities, with the expectation of accelerating the company’s growth. The company also announced that Ram Velidi of Sevin Rosen Funds and Tim Connor of Sequel Venture Partners have been named to InfoNow’s board of directors, joining existing members Mark Geene, Jeffrey Peotter, and Allan Spies.
InfoNow collects, processes and enriches channel sales and inventory data for companies that sell through channel partner networks. Since early 2006, with a new management team in place, InfoNow has completely restructured its organization and transformed its offering to a software-as-a-service (SaaS) model. Investing in its SaaS solution has enabled the company to significantly reduce operating costs while broadening its market opportunity.
Significant company achievements and developments under the new leadership include:
- Delivered revenue growth in the first half of 2007 of approximately 17% over the same period in 2006
- Reduced overall cost structure and developed operational efficiencies to deliver positive cash flow during the past twelve months
- Grew client base to 47 customers, including leading companies such as AMD, Polycom, APC and Kingston Europe
- Improved the company’s infrastructure and system reliability and availability through increased capital investment
- Expanded product offering with solutions for managing rebate, pricing and sales credit assignment data in addition to point-of-sale and inventory data
- Received U.S. Patent Office notice of allowance of patentable technology for InfoNow's geo-spatial business entity matching technology that provides entity identification rates significantly superior than competitive alternatives
“Already InfoNow has developed an impressive list of customers and our pipeline continues to grow as more and more companies discover the benefits of highly accurate and timely sales and inventory data delivered into their business systems,” said Mark Geene, CEO at InfoNow. “With this investment from Sequel and Sevin Rosen we can now more rapidly deliver on our product roadmap and continue to deliver innovative on-demand solutions that drive significant value for our customers. We will also expand our investments in sales and marketing with the goal of further accelerating our growth and leadership in the emerging market for channel data services.”
“InfoNow offers high-value solutions for both manufacturers and channel sales organizations, and has a clear technology advantage over alternatives,” said Tim Connor, partner at Sequel Venture Partners. “By moving to a software-as-a-service delivery model, the management team has increased sales momentum and positioned the company to further capitalize on this largely untapped market.”
The Series A Preferred Stock was sold in the financing for $0.5882 per share on an as-converted basis and, on a fully diluted basis; the Series A shares represent approximately 40% ownership in InfoNow. The conversion ratio is subject to upward adjustment based on the results of the company’s efforts to restructure and reduce its outstanding options pool. As a result, the effective purchase price that purchasers of the Series A Preferred shares will have paid for InfoNow common stock will range from $0.50 to $0.5882 per share. The holders of the Series A Preferred Stock are entitled to receive non-cumulative dividends equal to 8% of the initial purchase price paid for the Series A Preferred Shares prior and in preference to any dividends being paid to the holders of InfoNow common stock.
Upon the liquidation of InfoNow or in connection with certain major corporate transactions affecting InfoNow, the holders of the Series A Preferred Stock will be entitled to a liquidation preference equal to the original purchase price paid for the shares plus any declared but unpaid dividends, and thereafter will participate in additional liquidation proceeds on an as-converted basis with InfoNow’s common shareholders. The holders of the Series A Preferred Stock will vote together with the holders of InfoNow common stock on an as converted to common stock basis, provided that they will also be entitled to vote separately to elect two members to the InfoNow board of directors. The Series A Preferred shareholders have customary protective provisions.
InfoNow’s audited financial statements for 2006 and unaudited selected financial information for the first half of 2007 can be found on the company’s website at www.infonow.com/financials.html. Financial statements for 2005 and prior years are contained in reports filed with the Securities and Exchange Commission, and can be located at www.sec.gov.
InfoNow’s common stock has been de-registered under Rule 15d of the Securities Exchange Act of 1934. Accordingly, the company is not required to disclose information regarding its financial performance, or other material information, nor does it intend to make any such disclosures in the future. Investors and prospective investors should not expect that any financial or other information subsequent to June 30, 2007 will be made publicly available. Lack of publicly available information going forward could negatively impact our future share price and market liquidity.
About InfoNow Corporation
Based in Denver, Colorado, InfoNow provides SaaS-based channel data services that collect, process and enrich channel sales and inventory data for companies that sell through complex channel partner networks. InfoNow’s solutions help companies such as AMD, Polycom and SMC gain rich, timely and actionable information on channel sales, including enhanced market intelligence on partners and end customers. For more information, visit www.infonow.com.
About Sequel Venture Partners
Sequel Venture Partners is a Boulder, Colorado-based venture capital firm specializing in early-stage funding for emerging technology businesses located primarily in the Rocky Mountain region. Managing over $400 million in capital, Sequel focuses its investments in the areas of information technology, communications technology and health care.
About Sevin Rosen Funds
Sevin Rosen Funds is a top-tier venture capital firm with a record of funding successful companies since 1981. The SRF partnership has consistently made early-stage investments in pioneering technologies and companies with the potential to create new markets. The partners' broad range of venture and operating experiences in successful technology companies translates into a sustained commitment and contribution to the development of the ventures funded. The firm has offices in Dallas, Palo Alto and Austin. For more information, please visit www.srfunds.com.
Except for the historical information contained herein, matters discussed in this release are forward-looking statements that involve risks and uncertainties, and actual results may be materially different. Factors that could cause actual results to differ include the risk that sales of the company’s services may not develop as expected and the risk that the company may not be successful in forecasting and meeting customers’ demands for its software and services or deploy its solutions and services as expected.