Proxim Corporation announced Q2 revenues of $34.8 million, down from $45 million one year ago and $40 million in the previous quarter. The Q2 net loss was $(48.7) million, compared to $(6.7) million in the same period a year ago. Results included $12.5 million of restructuring charges for the consolidation of excess facilities, fixed asset write-offs, workforce reductions and contract termination costs. Proxim ended the quarter with $7.9 million in cash.
As part of its efforts to reorganize, Proxim has secured funding of at least $30 million and as much as $40 million from Warburg Pincus and Broadview Capital Partners. Funds will be used for ongoing business operations as well as to fund certain one-time restructuring expenses, including the settlement of a lease buyout obligation, and for legal expenses related to the patent infringement litigation with Symbol Technologies. The funding is provided in the form of short term secured exchangeable promissory notes bearing interest at 25% per annum. Proxim will seek immediate stockholder approval to convert these notes into convertible preferred stock, which in turn can be converted into Class A common stock at an initial conversion price of $1.15 per share. Upon the issuance of the Series B convertible preferred stock, Warburg Pincus and Broadview will also be granted warrants to acquire 18,000,000 shares of common stock.
