Terayon Receives Notice of Default From Bondholders
14 January 2006 - 9:30AM
PR Newswire (US)
SANTA CLARA, Calif., Jan. 13 /PRNewswire-FirstCall/ -- Terayon
Communication Systems, Inc. (NASDAQ:TERNE), a leading provider of
digital video networking applications and home access solutions,
previously announced on November 7, 2005 that the filing of its
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2005 (Form 10-Q) would be delayed and that it had
commenced an accounting review after determining that certain
revenues recognized in the second half of fiscal year 2004 may have
been recorded in incorrect periods. As a result of the delay in
filing its Form 10-Q, Terayon is not in compliance with its
obligation under the Indenture with respect to Terayon's 5%
Convertible Subordinated Notes due 2007 (Notes) to file with the
Securities and Exchange Commission (SEC) and the trustee of the
Notes (Trustee) all reports, information and other documents
required pursuant to Sections 13 or 15(d) of the Securities
Exchange Act of 1934. On January 12, 2006, Terayon was provided
written notice of default from holders of over 25% in aggregate
principal amount of the Notes outstanding based on Terayon's
failure to file its Form 10-Q. If such default is not cured within
60 days of this notice, an event of default will occur and the
Trustee or holders of at least 25% in aggregate principal amount of
the Notes then outstanding, upon notice to the Company, may
accelerate the maturity of the Notes and declare the entire
principal amount of the Notes, together with all accrued and unpaid
interest thereon, to be due and payable immediately. The Notes
currently outstanding have an aggregate principal amount of
approximately $65 million. The company ended 2005 with
approximately $101 million of cash and cash equivalents plus
short-term investments which represents a $3 million increase over
year end 2004 balances of approximately $98 million. "We were aware
of our obligations under the Indenture and have already considered
alternative actions," stated Mark Richman, Terayon's Chief
Financial Officer. "Given our cash position and reduction in cash
usage as a result of our restructuring of the business we are
comfortable with our cash position and we have several options
available." About Terayon Terayon Communication Systems, Inc.
provides digital video networking applications and home access
solutions that enable the delivery of advanced digital video, voice
and data services. Service providers worldwide have deployed more
than 6,000 of Terayon's digital video systems to brand their
programming, insert millions of digital ads, offer HDTV and other
digital video services. More than five million Terayon cable modems
and other home access solutions have been deployed by cable
operators globally to provide broadband Internet access and VoIP
telephony. Terayon maintains its headquarters in Santa Clara,
California; has sales and support offices worldwide and is on the
web at http://www.terayon.com/. "Safe Harbor" Statements under the
Private Securities Litigation Reform Act of 1995: Except for
historical information contained in this press release, the matters
discussed in this press release are forward-looking statements
within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to a number of risks and uncertainties that
may cause actual results to differ materially from those contained
in the forward-looking information. Such forward-looking statements
include, but are not limited to, statements relating to the nature
of Terayon's accounting review, statements relating to the expected
outcome of Terayon's accounting review, and other statement that
are not historical facts. The following factors, among others,
could cause actual results to differ from those set forth in the
forward-looking statements: the timing and success of any hearing
before a NASDAQ Listing Qualifications Panel, the results of the
completed review into possible accounting errors, the timing of the
filing of Terayon's Form 10-Q for the third quarter of fiscal year
2005, the need for any corrective actions in connection with
Terayon's accounting practices, the actual timing and extent of any
restatement of prior financial results, the reaction to any such
restatement by Terayon's stockholders and customers, as well as
changes in economic, business, competitive, technological and/or
regularly factors and trends. Additional factors that may affect
future results are contained in Terayon's SEC reports, including
its most recent Annual Report on Form 10-K and Quarterly Report on
Form 10-Q, particularly in the "Risk Factors" and "Management
Discussion and Analysis of Financial Condition and Results of
Operations" sections. Such filings are available at the SEC's
website http://www.sec.gov/. Terayon disclaims any obligation or
intent to update and revise the statements contained in this
release based on new information or otherwise. Note: Terayon and
the Terayon logo are registered trademarks of Terayon Communication
Systems, Inc. All other trademarks are property of their respective
owners. DATASOURCE: Terayon Communication Systems, Inc. CONTACT:
press, Rebecca West of AtomicPR, +1-415-402-0230, or , for Terayon
Communication Systems, Inc.; or investors, Kirsten Chapman, or
Moriah Shilton, , both of Lippert/Heilshorn & Associates,
+1-415-433-3777, for Terayon Communication Systems, Inc. Web site:
http://www.terayon.com/
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