Exhibit 99.1
FALCONSTOR COMPLETES REVERSE MERGER
WITH NETWORK PERIPHERALS
-FALCONSTOR NOW A WELL-CAPITALIZED PUBLIC COMPANY
LISTED ON NASDAQ UNDER TICKER SYMBOL FALC-
-TRANSACTION "ESTABLISHES THE NEW FALCONSTOR AS AN EMERGING LEADER IN
STORAGE NETWORKING SOFTWARE," SAYS FALCONSTOR PRESIDENT/CEO REIJANE HUAI-
MELVILLE, N.Y., August 23, 2001--FalconStor, Inc. ("FALC"), of Melville, New
York, announced today the completion of its reverse merger with Network
Peripherals Inc. ("NPI") (Nasdaq: NPIX), of Fremont, Calif. The transaction
establishes the merged company, which has adopted the name FalconStor Software,
Inc., as a publicly-listed, well-capitalized emerging leader in network storage
infrastructure software, one of the fastest-growing areas of the $44 billion
global storage industry. As a result of the transaction, FalconStor is now
listed on the Nasdaq National Market and will trade under the symbol FALC.
As a result of the merger, the formerly known Network Peripherals or NPI, has a
total of approximately 44.7 million shares of common stock outstanding. Of these
shares, approximately 13.4 million, or 30 percent, are held by stockholders of
the former NPI and approximately 31.3 million, or 70 percent, were issued by NPI
to stockholders of the pre-merger FalconStor, which was privately held.
As indicated on May 7, 2001, when the definitive merger agreement was announced,
the merged company has adopted FalconStor's business strategy, and will be
headed by a management team led by FalconStor President and Chief Executive
Officer ReiJane Huai. In the 1990s, Mr. Huai built Cheyenne Software into an
industry leader in server-based backup, security and communications solutions,
culminating in Cheyenne's acquisition by Computer Associates in a $1.3 billion
transaction in 1996.
Mr. Huai said, "This transaction establishes FalconStor as an emerging leader in
storage networking software. We now have the strategic, operational and
financial flexibility that comes with being a publicly traded company with a
significant cash position sufficient to fully fund the continued aggressive
implementation of our business plan. In short, we now have the business
strategy, leading-edge technology, products, people, strategic relationships,
and financial strength needed to capture what we believe is a major market and
value-creation opportunity."
FalconStor's unique open software approach to storage networking enables IT
managers to adopt state-of-the-art Fibre Channel technology while at the same
time leveraging their prior investments in SCSI and Ethernet infrastructure,
thereby maximizing the return on their IT investments and minimizing the cost of
deployment and ongoing support. FalconStor's proprietary software technology can
rapidly embrace advanced I/O interfaces, communications standards and innovative
storage services as they are introduced, and its unique architecture has been
recognized and licensed by industry partners in the Gigabit Ethernet Switch,
SCSI-to-Fibre Channel Router, Disk Subsystem and Appliance spaces.
"FalconStor's rapid progress has been impressive," said John McArthur, vice
president of Storage Research at IDC. "The company just recently came out of
stealth mode and has already achieved a major business milestone in becoming a
public company. Equally as important, however, is the rapid delivery of
functional capabilities in their virtualization technology. The newly found
financial muscle combined with an architecture that supports freedom of choice
in both storage systems and storage networks, positions the company to be an
important competitor in the market for storage management software."
FalconStor's flagship IPStor(TM) product, which began shipping in the second
quarter of 2001, is today the only all-software solution that offers
mission-critical , virtualized, storage services (unified SAN and NAS,
mirroring, replication, application-aware snapshot, fast backup/restore
enablers, etc.) over IP/iSCSI- and Fibre Channel-based networks with high
performance, security, reliability, scalability and manageability. FalconStor
has filed several patent applications in connection with its proprietary
technology. FalconStor's commitment to open standards and universal connectivity
has been endorsed by such industry leaders as Adaptec, Cisco, Crossroads,
Emulex, Fujitsu, IBM, MTI, NEC, and QLogic.
Credit Suisse First Boston acted as financial advisor to FalconStor with regard
to the transaction, and NPI was advised by Lehman Brothers.
About FalconStor
----------------
FalconStor Software, Inc., is a software company founded with the mission to
help enterprises rise above ever-expanding storage complexities and costs by
providing the first software-only storage networking solution that simplifies
storage management while drastically reducing total cost of ownership. With an
unprecedented combination of manageability, performance, security, and
flexibility, FalconStor's flagship product, IPStor(TM), transcends the
limitations that have historically confined SANs to local data centers.
IPStor is a storage networking software infrastructure that enables companies to
utilize storage efficiently, execute backup quickly, expand capacity smoothly,
and significantly reduce total storage management costs. It provides vital
storage services-virtualization, active-active failover, capacity-on-demand,
remote replication, mirroring, application-aware snapshot, zero-impact
backup/restore enablers, and more-through a software-only design that runs on
existing industry standard hardware. By incorporating today's well established
data transport protocols (Fibre Channel, SCSI and IP) as well as emerging
standards such as iSCSI and InfiniBand, IPStor provides both SAN and NAS to
companies with immediate total freedom of choice in connectivity and storage
hardware. Its future-proof architecture allows companies to stay on top of their
ever-evolving data storage requirements.
Founded in 2000, FalconStor was privately held and is headquartered in Melville,
NY. International offices include Paris, France; Taichung, Taiwan; and Tokyo,
Japan. The company is a voting member of the Storage Networking Industry
Association (SNIA). For more information, visit www.falconstor.com or call
1-631-777-5188.
FalconStor will conduct an investment community conference call at 9:00 a.m. EDT
(6:00 a.m. PDT) today, August 23, 2001, to discuss this announcement. Investment
professionals may access the conference call by dialing 800-946-0712
(international callers only please use 719-457-2641) approximately 10 minutes
prior to the start of the call. A replay of the call will be available beginning
at 12:00 p.m. EDT today, August 23, through Thursday, August 24, at 12:00 p.m.
EDT by dialing 888-203-1112 (international callers only please dial
719-457-0820), and using access code 491779. Additionally, a replay of the call
will be available at www.falconstor.com.
With the exception of historical information, the statements set forth above
include forward-looking statements (including but not limited to expected
benefits to be realized from the merger) that involve risk and uncertainties
that could cause actual results to differ materially from those in the
forward-looking statements. These risks and uncertainties include: the early
stage of FalconStor's business; potential delays in product development by
FalconStor; market acceptance of FalconStor's products and services; rapid
technological change in the storage and networking industries; competition in
the storage networking software market; the ability to achieve profitability;
potential issues involving intellectual property and other disputes; and other
risk factors discussed in NPI's and FalconStor's reports on Forms 10-K, 10-Q and
other reports filed with the Securities and Exchange Commission.
CONTACTS FOR FINANCIAL AND INDUSTRY MEDIA:
Herman Chin, FalconStor
631-962-1163
herman.chin@falconstor.com
Christine Rogers, FalconStor
631-962-1130
christine.rogers@falconstor.com
