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Private Equity Week Wire

TORONTO — A third round of venture capital funding from a group of respected firms experienced in the technology sector will help Castek Software Factory Inc. advance product development and propel market access, Castek Chief Financial Officer Fay Wu announced here today.
The $10 million funding, from the Netherlands-based p3 Technology Partners, CIBC Capital Partners and Altamira Management Ltd., both of Toronto, was completed early in June. The funding marks the first Canadian investment by p3, a Dutch VC fund backed by bank-insurers ING and Achmea, and the third time that Altamira has participated in a Castek placement.

NEW YORK — AOL Time Warner Inc. (NYSE: AOL) announced today the formation of the AOL Time Warner Opportunity Investment Fund, a new initiative that will invest approximately $100
million over a three-year period in companies owned or managed by minorities and women. The Fund will invest in businesses that have significant diversity in their senior management,
that target under-served markets, and whose operations have a strategic fit with AOL Time Warner’s businesses.
AOL Time Warner also announced the appointment of Rachel S. Lam as vice president of the Company’s AOL Time Warner Investments unit and managing director of the AOL Time
Warner Opportunity Investment Fund. Before joining AOL Time Warner, Ms. Lam was a principal at Quetzal/Chase Capital Partners, where she was part of a team responsible for managing a private equity fund focused on
investing in communications companies with significant diversity within their management.

SAN FRANCISCO — Immediately following the version 2.0 release of its market leading, 100% Java Mobile Application Server (M-1 Server), Aligo, Inc. announced the completion of an $11.2 million second round of funding. The funding was led by Thomas Weisel Venture Partners (TWVP), a venture capital fund of Thomas Weisel Partners, and RBC Capital Partners (RBCP), the private equity investing arm of Royal Bank Financial Group. Aligo has already differentiated itself with the only 100% Java Mobile Application Server to easily transform an enterprise’s existing applications and infrastructure into a fully wireless-enabled platform. With Aligo’s M-1 Server, developers avoid the complexity of wireless protocols, languages, networks, or devices; they can rapidly build an application once using M-1 Server and automatically deliver it to ANY mobile device.

MOUNTAIN VIEW, CALIF. — Vernier Networks, Inc., a networking company that provides hardware and software to protect, manage and enhance wireless networks, today announced it has secured $8.5 million dollars in outside funding. Barely three months after being spun off from Judy Estrin’s and Bill Carrico’s networking technology company Packet Design, Vernier secured funding from lead investor Foundation Capital as well as Doll Capital Management, Masthead Venture Partners and Weber Capital Management. Vernier also named industry veteran Doug Klein chief executive officer and added Foundation Capital’s Bill Elmore and Doll Capital Management’s Rob Theis to Vernier’s board of directors. Formerly vice president operations at Packet Design, Doug Klein was appointed chief executive officer of Vernier to lead the company into the emerging wireless LAN category. Prior to joining Packet Design, Klein served as president and chief operating officer for NuvoMedia, Inc., the developer of the Rocket eBook hand-held electronic reading device which was acquired by Gemstar-TV Guide International in January 2000. He also spent ten years at Network Computing Devices, where he had direct management responsibilities for all NCD engineering, program management and service and support.

CHARLOTTE, N.C. — Global Capital Partners Inc. (Nasdaq: GCAP) announced today that it has closed an equity financing of $2,000,000 of its common stock at $.64 per share to a group of private investors. The investors also received warrants to purchase another $2,400,000 of the Company’s common stock at a price of $.77 per share. The Company intends to use the capital to strengthen its balance sheet and for working capital purposes. Global Capital Partners owns and operates Global Capital Securities Corporation, a full-service investment banking and brokerage firm, with 14 offices nationally.

SAN FRANCISCO and MOUNTAIN VIEW, CALIF. — RateXchange Corporation (AMEX: RTX) today announced it has selected Telseon’s IP (Internet Protocol) Service to distribute its metropolitan area bandwidth traffic. Telseon is a leading metropolitan optical network provider. Combining RateXchange’s long-haul customers with Telseon’s dense metro footprint will enable buyers, sellers, and traders of IP bandwidth to drastically reduce lapsed time between a transaction request and its actual delivery over a secure, high-performance national IP network. Under the terms of the agreement, RateXchange will have the ability to reserve metro port capacity at 10 data centers in Chicago, Los Angeles, Dallas, Northern Virginia, New York and the San Francisco Bay Area to connect to the Telseon network. With the Telseon IP Provisioning System, the industry’s first and only web-based self-provisioning system, RateXchange customers will be able to scale their bandwidth on the fly from 1 Mbps to 1000 Mbps and create virtual connections to trading partners within minutes after completing a transaction.

DENVER — Medical Simulation Corporation (MSC), a Colorado-based healthcare education company, announced today that its Series B Preferred financing has closed oversubscribed. In addition, the company has named David McKenzie vice president of finance and Harriet Press Brown, Ph.D., director of education. The proceeds from the round will be used to fund Medical Simulation Corporation’s operational growth. The company will open two interactive training centers in the fourth quarter of 2001, and is planning to install SimSuite(TM) Education Centers in 13 more hospitals and institutions across the country by the end of 2002.

CLEVELAND — Gliatech Inc. (Nasdaq: GLIA) announced today that the Company has received an additional $2.5 million under its agreement with Paul Capital Royalty Acquisition Fund, L.P. (“PCRAF”). The Company received an initial $5 million cash infusion in April 2001, and together with the recent investment, has now received a total of $7.5 million. The Company’s agreement with PCRAF further provides that the Company will receive an additional $7.5 million upon satisfaction of certain conditions, including the commercial relaunch of ADCON(R)-L in the U.S., and up to $15 million of additional funding possible thereafter. Gliatech Inc. is engaged in the discovery and development of biosurgery and pharmaceutical products. The biosurgery products include ADCON(R) gel and ADCON(R) solution, which are proprietary, resorbable, carbohydrate polymer medical devices designed to inhibit scarring and adhesions following surgery. Gliatech’s pharmaceutical product candidates include small molecule drugs to modulate the cognitive state of the nervous system and proprietary monoclonal antibodies designed to treat inflammatory disorders.

JACKSON, MISS. — Roughly four months after its official re-launch and name change from PennyPI, (pronounced no-be-us), the first and largest unbiased information repository of Outside Market intelligence, closed its second round of funding totaling $4.9 million. This funding better positions Knobias to meet individual and institutional subscribers’ growing enthusiasm for the Company’s unique services. The acceptance received from the institutional markets, as well as the raising of capital in this economic downturn, validates the companies concept for research within this market. The Company will increase its staff by 30 percent to serve its existing subscriber base and accommodate the influx of new subscribers gained via ongoing efforts to further market penetration. Additionally, Knobias just launched its institutional services Web site built and customized exclusively for market makers, retail brokers, investment bankers, hedge funds and other financial institutions.

ATLANTA –BrainWorks Ventures, Inc. (OTC BB: BRAV) has named SciTrek CEO Lewis A. Massey and Dr. Benn R. Konsynski of Emory University to BrainWorks Ventures’ board of advisors. Founded by economist Dr. Donald Ratajczak, BrainWorks Ventures is a venture development and asset management company focused on building a portfolio of high-growth business opportunities developed from corporations and universities.
Massey is the former Georgia secretary of state and now serves as president and CEO of SciTrek, an Atlanta-based math, science and technology museum. He previously served as president and CEO of Directo, Inc., a financial services management and marketing firm that specializes in matching banks and employers for payroll service operations.

CAMBRIDGE, Mass. –The BioVentures II-Group of Funds managed by MPM Capital announced today the acquisition of a major ownership stake in Kourion Therapeutics, a Dusseldorf (Germany) based start-up biotechnology company out of Heinrich-Heine-University. MPM led the transaction and has committed a total of up to E12 million to fund research and development activities in the stem cell arena.
Kourion’s proprietary technology is based on unique somatic stem cells in cord blood, and includes their ex-vivo expansion and cell differentiation into specific tissue for the regeneration of cardiac, neuronal, hepatic and bone tissues. Currently, the company is evaluating bone progenitor cells to heal critical bone defects in preclinical animal models. The company operates a GMP facility with regulatory government accreditation.

BALTIMORE — ABS Capital Partners, a leading private equity firm focused on investing in established growth companies, announced today that it has raised $450 million for its fourth private equity fund, ABS Capital Partners Fund IV (the “Fund”), and now has approximately $1.4 billion under management. With the closing of the Fund, Deric Emry, Ian MacLeod and Laura Witt were promoted to General Partner. They join existing General Partners Don Hebb, Tim Weglicki, Andy Sheehan and John Stobo. In addition, Stephanie Manuel was promoted to Marketing and Communications Partner and Chuck Dieveney was promoted to Finance Partner. The Fund will continue ABS’ strategy of investing in companies that provide software, services and infrastructure to Global 2000 corporations, health care enterprises and media/communications companies. The Fund’s Limited Partners include return investors CalPERS, Pennsylvania State Employees Retirement System, San Francisco City and County Employees Retirement System and the Wellcome Trust. New investors include the Illinois State Board of Investment, Ohio Bureau of Workers’ Compensation, Washington University, Johns Hopkins University and Partners Healthcare System.

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