RealTime IT News

Next Level Gets Cash Infusion

Next Level Communications Inc. , vendor of integrated broadband access systems for Very-High-Speed DSL (VDSL), managed a little breathing room Tuesday with a $20 million cash infusion from investor Motorola Inc.

Next Level has been struggling with slowing carrier spending, reporting a $27.8 million net loss for its third quarter in October.

Tuesday's deal adds an additional $20 million to the $60 million loan Motorola floated to Next Level in May and June. Next Level said the latest financing is re-payable in May 2003, and Motorola will receive five-year warrants to purchase 2.5 million shares of Next Level common stock at a price of $4.29 per share. Next Level shares closed at $3.30 Monday.

The terms and conditions of the loan are the same as those of the earlier loan, but Motorola will be given an option to convert up to $20 million of debt into Next Level's next round of equity financing.

"Next Level is pleased that our major shareholder continues to demonstrate financial commitment to the company," said James Ide, Next Level's chief financial officer. "Motorola's financial and marketing support is a key advantage as we roll out our standards-based VDSL products worldwide."

Motorola's tight relationship with Next Level dates back to May 2001, when the two forged an agreement to facilitate the deployment of Next Level's NLevel3 Unified Access Platform worldwide. Under that agreement Motorola mobilized its global sales organization to sell its integrated multimedia broadband access systems to international telecommunications customers. Motorola also agreed to assist Next Level with service and logistics, and to provide additional personnel and infrastructure to help implement and support large-scale deployments.