VitalStream Raises $11 Million

Jun 18, 2004

VitalStream Holdings, Inc., the parent company of VitalStream, Inc., a provider of integrated content delivery and streaming media services, has closed a financing transaction with institutional investors generating gross proceeds to the company of $11 million. Under the financing, VitalStream will issue approximately 17.9 million shares of common stock, as well as warrants to purchase an additional approximately 5.4 million shares of common stock. VitalStream has agreed to file a registration statement with the Securities and Exchange Commission covering the resale of the shares.

VitalStream plans to use the net proceeds from this transaction for general corporate purposes, including investment in research and development, facilitation of strategic acquisitions, and related costs, strengthening its balance sheet to attract new customers, obtaining more favorable terms from vendors, and satisfying certain qualification criteria for listing on the Nasdaq SmallCap Market or other exchange.

The lead investor in the transaction is WaldenVC, a San Francisco-based venture capital firm that invests primarily in digital media companies. Phil Sanderson, a general partner at WaldenVC, will join VitalStream's board of directors on June 30, 2004. Other investors include Dolphin Equity Partners, Newlight Associates, Stephens Investment Management, and the RS Orphan Fund, headed by Paul Stephens, a co-founder of the investment banking firm of Robertson Stephens & Company. ThinkEquity Partners LLC acted as the exclusive placement agent. In addition, several non-director members of VitalStream's executive management team participated in the transaction, including Mark Belzowski, CFO; Michael Linos, VP of sales; Arturo Sida, VP and general counsel; and Dave Williams, VP of operations.