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Thursday
March 15, 10:38 am Eastern Time
Company Press Release
North
American DataCom Enters Into Agreement for Up to $50 Million
of Equity Financing
IUKA,
Miss.--(BUSINESS WIRE)--March 15, 2001--North American DataCom,
Inc. (OTC BB: NADA - news), the Fiber Optic and Data Storage
Company, announced that it had entered into a binding Letter
of Agreement for a minimum of $25 Million in equity financing,
with an option for an additional $25 Million, with IFG Private
Equity, LLC, an Atlanta-based institutional investor.
``In
this difficult capital market, we are very encouraged to join
with a financing partner that has a very active interest in
our Business Plan for a hybrid data storage and fiber optic
network in the southeast,'' said Robert R. Crawford, president
and chief executive officer of North American DataCom.
Under
the terms of the IFG-North American DataCom Agreement, IFG
will purchase up to $50 Million of North American DataCom's
common stock over the next 24 months. The agreement is planned
to operate in a manner similar to a line of credit, allowing
North American DataCom to draw upon funds periodically, when
and if desired. The funding agreement comes in the wake of
North American DataCom's business plan revisions and six-month
results. This funding is planned to provide the underlying
support to proceed with the business plan.
The
funding is subject to certain items, including completion
of due diligence and finalization of the funding documents.
North American DataCom intends to use the financing to immediately
expand its fiber optic network and related data storage operations.
Mr. Tony Gentile, President of Institutional Finance Group,
Inc., the manager of IFG, stated, ``North American DataCom
is currently deploying a 3,000 plus mile fiber optic backbone
network in the southeastern United States, using the latest
in fiber, optical transmission and broadband wireless distribution
technologies. The compelling business strategy set in motion
by Robert Crawford and North American DataCom's management
team make us pleased to be part of this effort.''
``The
equity financing program that we have agreed to implement
with IFG provides the capital foundation to proceed with the
initial 550 mile segment of our plan and the initiation of
construction of our state-of-the-art hybrid data centers,''
said Mr. Crawford. ``We hope to build upon this round of financing
and proceed with the Business Plan developed with Cap Gemini
Ernst and Young. To accomplish our objectives in the current
economic environment we have divided the Business plan into
six independent network segments,'' said Mr. Crawford. ``Segment
1, running from Memphis to our facility in Iuka, Mississippi,
and on to Atlanta, is tactically and strategically the most
important. The capital budget to develop and operate the Segment
1 network and EDS business is planned at approximately $75
million through the first 18 months of operation, ending July
2002. The Segment 1 Business Plan projects revenues and net
income of approximately $88 million and $19 million, respectively,
for the next fiscal year ending June 2003. We remain firm
in our conviction to develop the network in rural South, an
under served area, and this will position us to benefit in
the future from expected traffic growth.''
Safe
Harbor Statement
Statements
in this release express management's beliefs and expectations
regarding future performance. These statements are forward-looking
and involve risk and uncertainties. These risks include, but
not limited to, the ability to negotiate venture agreements,
properly identify acquisition partners, manage and integrate
acquired businesses, react to quarterly fluctuation in results,
raise working capital and secure other financing, respond
to competition and other rapidly expanding technology, deal
with market and stock price fluctuation, and other risks.
These risks are and will be detailed, from time to time, in
North American DataCom, Inc. Securities and Exchange Commission
filings. Actual results may differ materially from management's
expectations.
North
American DataCom's principal executive offices are located
at 751 County Road 989, Building 1000, Iuka, MS 38852. For
further information, contact Investor Relations, 662-424-5030,
or by e-mail at investorrelations@nadata.com.
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