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LinuxDevices.com: Update on Lineo Recapitalization

Apr 24, 2002, 19:00 (0 Talkback[s])
(Other stories by Matt Harris)

"Lineo will complete its recapitalization this week. As a result of the recapitalization, the company will be in a better position than ever to succeed. The legal mechanism used by our venture capitalists to accomplish the recapitalization is foreclosure on certain secured demand notes held by the venture capitalists. The result: the same people, doing the same work, using the same IP, for the same customers, with a new injection of capital, a strong balance sheet and the very real prospect of profitability by mid-year and cash flow positive operations within the next six months -- and perhaps as soon as Q2.

"What does this mean for customers? A stronger Lineo, a better financed Lineo, with a greater capacity to execute on contracted work. We are tenacious at Lineo, we believe in the embedded Linux market, we helped to create the market and now we plan to make sure the market thrives. Our Embedix solutions are helping drive that market and we will work day and night to make sure that continues.

"What does this mean for former employees? Ordinarily, this sort of legal proceeding will leave former employees in a difficult position, but the new legal entity has put a plan in place to ensure that former employees receive all of their paid vacation accruals. Lineo's CEO has made this a condition of his employment with "Lineo v2," and has set his salary at $1/year until all of these obligations are satisfied..."

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