SUNNYVALE, Calif.-Conductus Inc. received $15 million in equity financing to support the commercialization of its ClearSite system in the wireless communications and wireless Internet access markets.
The funding was received both from existing shareholders Palo Alto Investors, Alloy Ventures Inc. and Bay Area Microcap Fund, as well as new investors Pequod Investments L.P., ACI Capital America Fund L.P., Cypress Growth Fund and Seki Technotron L.P. Two current members of the Conductus board of directors also contributed to the funding, one as an individual, another through his investment fund.
Under terms of the financing, Conductus has issued 375,000 preferred shares at $40 per share with each preferred share being convertible into 10 shares of common stock with a cumulative stock dividend of 6 percent. Conductus also has issued warrants to purchase 750,000 shares of common stock at $4 per share in connection with the financing. The terms of the financing were established with lead investors on Dec. 10, according to the Sunnyvale, Calif.-based company.
“The amount of this latest financing is more than we were initially seeking,” said Charles Shalvoy, president and chief executive officer of Conductus. “We intend to use a portion of the proceeds from this financing during the next year to expand our sales and marketing effort, to develop new products for the wireless market and to increase our manufacturing capacity.”
In related news, Conductus said the first urban Time Division Multiple Access field trials of its ClearSite system expanded busy-hour capacity by 80 percent at a major cellular carrier’s site. The company claims this improvement represents a potential revenue increase of $300,000 per year resulting in a payback of the carrier’s investment within approximately two months.
“We were delighted to find that the real-world performance of the system in this first test in an urban TDMA network exceeded our expectations,” said James P. Simmons Jr., vice president of marketing and sales for Conductus.
“These dramatic trial results for this 2G (digital) urban interference application are a significant milestone for Conductus.”
Previously, the cellular carrier used a highly selective conventional radio-frequency filter to reduce interference at the cell site. The problem persisted, causing the system to shut off half of the voice channels at the site, according to Conductus.
