InSciTek closes $1.5 Million
For Immediate Release
Media contact:
Sandra Gault
585-421-3850 x124
press@allworx.com
Investment in revolutionary server for small businesses reaches $5 million
ROCHESTER , NY , Feb. 4, 2003 – InSciTek Microsystems, Inc. recently raised $1.5 million through a combination of equity and debt-based investments, it was announced today. The funding will enable the company to move forward in March with its national launch of the Allworx 10x all-in-one communications and information server. To date,$5 million has been invested in the development and launch of the Allworx product.
The most recent funding includes $1 million in debt-based mezzanine financing with Cephas Capital Partners LP in an agreement signed December 30, 2002; and $500,000 raised in equity with upstate New York Angel investors with support by Executive Venture Partners in Rochester. In an earlier round of funding in 2002, InSciTek raised more than $566,000. Also, the company has contributed approximately $3.3 million over the last two years in cash retained earnings from its successful consulting operations, bringing the total investment in the Allworx product to $5 million.
"InSciTek is an excellent investment opportunity because the Allworx server provides a real growth opportunity in the struggling telecommunications sector," said Bill Hughes, CEO of HPA Consulting Group, Inc. "Telecommunications providers are looking for new solutions that will improve retention of customers in the small business market. There is a very real potential for InSciTek to form a relationship with a significant player in this marketplace, in addition to offering the product direct. All the while, InSciTek's successful consulting practice provides investors with confidence that the company will continue to generate revenue and grow, even in a tumultuous market."
"After meeting the company initially in January of 2002, we decided to fund InSciTek and its product launch for three reasons," said Jeffery Holmes, managing director of Cephas Capital. "One, InSciTek has an excellent track record and a very solid foundation to build upon. Two, we feel very positive about the integrity and competency of the senior management team. They have been very diligent and creative in their approach to the business. Three, we recognize the benefits of the Allworx product. It really addresses a time-consuming and expensive challenge facing small businesses."
The Allworx system, which is now available locally, is designed to eliminate IT infrastructure costs and headaches of small and mid-size businesses, providing a powerful, flexible communications system. The Allworx 10x is a true convergence server that gives small businesses the communications power and presence of big companies at a surprisingly manageable cost.
This fully integrated solution not only replaces multiple systems—such as a traditional telephone system and a network PC server, among others--but also offers technologies and capabilities not typically available to the small business. Beyond the basic systems—phone and network services, Allworx 10X delivers the communications power and performance necessary for business success today.
"Allworx 10x will save a small business thousands of dollars, time, and headaches by simplifying business communications and data infrastructure without sacrificing features and productivity," said George E. Daddis Jr., CEO and president of InSciTek. "The product has been tested and proven. Now our sales, support, and installation services are in place so we can deliver an easy purchase and installation experience for our customers."
Daddis estimates the market opportunity for the product to be substantial. "Small businesses are fueling America 's economy, yet there is no dominant vendor filling this IT need in this market." The AMI-USA Small Business Forecast estimates the market opportunity at 2.4 million small businesses in 2003, growing at an average rate of 18% CAGR over 3 years.
About HPA
HPA Consulting Group, Inc. (HPA) is a privately owned consulting firm headquartered in Rochester, NY providing specialized services in Voice and Data Communications. HPA was founded in 1994 by Bill Hughes and Tom Phelps. Together, the HPA executive team has over 150 years of experience in many facets of voice and data communications. For more information, visit the company's Web site at www.hpagroup.com.
About Cephas
Cephas Capital Partners LP, a $40 million Small Business Investment Company headquartered in Rochester, NY, was formed by Holmes and Clint Campbell in 1997, along with six regional community banks, to provide growth capital to small- and medium-sized businesses.
About InSciTek
InSciTek Microsystems Inc. is a provider of reliable, easy-to-use, all-in-one data and telecommunications servers for small businesses. The company's flagship product, the Allworx server, provides small businesses with all the mission-critical communications support they need in a single appliance that is easily purchased, installed, and supported without the need to engage outside resellers or service providers. It combines PBX functionality with network services, Internet access, remote access, and group collaboration tools. It is designed to be unprecedented in its simplicity, comprehensiveness, and affordability.
InSciTek was founded in 1998 by George Daddis, James Herrmann, and Jeff Szczepanski, all seasoned executives with experience at Fortune 500 companies. InSciTek also is a successful consulting company. Its experienced engineers apply their expertise to help other businesses develop high performance, low cost, real-time networked solutions. The company is located at 635 Crosskeys Office Park in Fairport , NY . For more information, visit the company's web site at http://www.InSciTek.com.
