Ashton Technology Group and OptiMark Innovations Inc.
Announce Completion of Strategic Investment
Ashton also Announces Completion of Related Transactions
Jersey City, NJ, and Philadelphia, PA, May 8, 2002
– The Ashton Technology Group, Inc. (OTCBB: ASTN) and OptiMark Innovations Inc.,
today announced the completion of the strategic investment in Ashton by Innovations
and the re-launch of Ashton’s business.
As a result of the transaction, Ashton has received
$7,272,727 in cash, as well as intellectual property and technology in exchange for shares
of Ashton common stock, par value $.01 per share, representing 80% of the total issued and
outstanding shares of Ashton common stock at closing. In addition, Innovations has lent
$2,727,273 in cash to Ashton in exchange for a senior secured convertible note.
Ashton intends to use the cash, intellectual property and
technology proceeds from this transaction to re-launch its businesses. The immediate focus
will be expanding the guaranteed liquidity program for buy-side institutions. Subsequently,
Ashton intends to use the remaining proceeds from the transaction along with the proprietary
quantitative trading algorithms and exchange platforms received from OptiMark Innovations to
penetrate new markets that will benefit from Ashton’s low-cost guaranteed liquidity.
“This investment brings vital capital, technology, leadership
and relationships to Ashton that will help position the company as a valuable liquidity provider
to institutional investors” said Robert Warshaw, the acting CEO of Ashton. “We are prepared
to immediately offer institutional investors the highest levels of low-cost liquidity in a
broader universe of stocks.”
Mr. Warshaw said Ashton, over the next three months, plans to
introduce substantial enhancements to its product offerings, including increasing the number
of match sessions to 30-minute increments, allowing institutional traders to gain access to
Ashton’s low cost liquidity throughout the day.
In conjunction with the closing, OptiMark Innovations Inc.
disclosed that it had received a private equity investment from Draper Fisher Jurvetson ePlanet
Ventures. The proceeds of this investment were used by OptiMark Innovations to fund its
investment in Ashton described above.
Upon the closing of the OptiMark Innovations transaction,
Ashton announced the following:
Issuance of Shares/Resignation of Certain Directors
Ashton has issued 608,707,567 shares of its common stock to
Innovations and reserved an additional 52,870,757 shares of its common stock for conversion
of the senior secured convertible note issued to Innovations. Concurrent with the closing,
Ashton has accepted the resignations of Messrs. Thomas Brown, K. Ivan Gothner, Fredric W.
Rittereiser and William W. Uchimoto as members of the Board of Directors.
New Executive Management/Board of Directors
Fred Weingard, Ashton’s chief technology officer, remains
on the Board of Directors and will be joined by Mr. Warshaw, Trevor Price, Ashton’s new chief
operating officer, and Ronald D. Fisher, managing director of SOFTBANK Capital Partners.
Additional directors shall be named in the near future.
Ashton’s new Board of Directors named Mr. Warshaw as acting
chief executive officer, Trevor Price as chief operating officer and James
Pak as chief financial officer. They join Fred Weingard (chief technology officer),
Jennifer Andrews (executive vice president, finance) and William Uchimoto (general counsel)
as members of Ashton’s executive management team.
RGC International Investors
Ashton also announced the re-structuring of its existing
agreements with RGC International Investors, LDC. RGC has exchanged the 9% Secured
Convertible Note of Ashton dated July 13, 2001 for (i) a 7.5% Senior Secured Note that
will mature in four years and (ii) warrants to purchase shares of Ashton common stock.
In addition, Ashton has re-paid the principal and accrued interest in connection with a
$250,000 bridge loan extended to Ashton by RGC on April 11, 2002.
Separation Agreement with Fredric W. Rittereiser
In connection with Fredric W. Rittereiser’s resignation
as a director and the termination of his existing employment agreement, Ashton has entered
into a separation and release agreement. The agreement calls for cash payments totaling
$150,000, payable within a year from the close of the transaction with Innovations.
Mr. Rittereiser will also receive four million shares of Ashton common stock and health
care benefits for one year.
About The Ashton Technology Group, Inc.
Ashton Technology, through its subsidiaries, provides
global institutional investors with low-cost liquidity in S&P500, NASDAQ 100 and Russell
1000 securities. Ashton’s guaranteed price/fill program is a highly reliable, easily
accessible source for anonymous block liquidity, eliminating market impact and
guaranteeing trade execution results that beat 80% of all institutional equity
trades (Elkins-McSherry). As a result of the investment in Ashton by Innovations,
OptiMark Inc., SOFTBANK Capital Partners and Draper Fisher Jurvetson ePlanet Ventures
are indirect investors in Ashton.
About OptiMark Innovations Inc.
OptiMark Innovations Inc. is a holding company funded
by OptiMark, Inc. and affiliates of SOFTBANK Capital Partners and Draper Fisher
Jurvetson ePlanet Ventures.
About Draper Fisher Jurvetson ePlanet Ventures
Draper Fisher Jurvetson ePlanet Ventures is a global venture capital firm
focused on the information technology sector. DFJ ePlanet was founded in 1999 to take
advantage of the growing trend towards globalization in technology by the leading
Silicon Valley-based venture capital firm, Draper Fisher Jurvetson, in partnership
with Europe-based ePlanet Partners. DFJ ePlanet Ventures has offices in Redwood City,
CA, London, Tel Aviv, Singapore, Hong Kong and Tokyo.
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Certain matters discussed in this news release may
constitute forward-looking statements within the meaning of the federal securities
laws. Although Ashton believes that the expectations reflected in such forward
looking statements are based on reasonable assumptions, it can give no assurance
that its expectations will be achieved. The accuracy of such statements is
subject to a number of risks, uncertainties and assumptions that may cause actual
results to differ materially from those projected, including, but not limited to,
the effect of general economic conditions. These and other factors that could cause
or contribute to actual results differing materially from such forward-looking
statements are discussed in greater detail in Ashton's filings with the Securities
and Exchange Commission.
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