The semiconductor, personal computer and telecommunication markets continue to show considerable down trends from historical high levels in 2000. These markets presently also demonstrate slow acceptance of new semiconductor technologies such as DDR Sync DRAM and Rambus memory that directly affect the Company’s performance. Should these conditions continue, management of the company can make no assurances that the Company will meet any of the financial targets set forth in the Series A Private Placement Agreement. New Century Equity Holdings Corp. (Nasdaq: NCEH) (“New Century”) participated in the financing through the purchase of $1 million of the Company’s Series A Preferred Stock. Tanisys has agreed to call a special meeting of its shareholders to vote on a proposal to authorize additional common stock necessary to facilitate the conversion of the Series A Preferred Stock. The holders of the Series A Preferred Stock will be entitled to vote with the holders of the common stock at the special meeting, and will control sufficient votes to approve the proposal. Immediately after the special meeting, the shares of Series A Preferred Stock initially issued would be convertible into approximately 78% of the then outstanding common stock. If Tanisys is required to issue all of the shares of Series A Preferred Stock that it could potentially be required to issue in connection with the Series A financing, those shares would be convertible into approximately 97% of the then outstanding common stock. In connection with the transaction described above, two members of the Board of Directors of Tanisys resigned, and New Century appointed two directors to the Board. Subject to certain requirements, New Century will have the right to appoint a third member to Tanisys’ five member Board of Directors. Also in connection with the transaction described above, the Board of Directors of Tanisys approved, subject to shareholder approval, a new stock option plan, pursuant to which the Board may grant stock options covering up to 15% of the fully diluted common stock, including the Series A Preferred Stock as-if-converted into common stock. Shareholders will receive additional information regarding the matters described herein in the proxy materials related to the special meeting. This press release includes statements that may constitute “forward-looking” statements, usually containing the words “believe,” “estimate,” “project,” “expect” or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company’s products in the marketplace, competitive factors, new products and technological changes, product prices and raw material costs, dependence upon third-party vendors, and other risks detailed in the Company’s periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release. 6 |
INVESTOR RELATIONS: 7 |