Sorrento Networks closes $6.35 million financing

5 January 2004 San Diego, CA Lightwave -- Sorrento Networks Corp., supplier of optical networking equipment for carriers and enterprises worldwide, has closed its previously announced financing to raise $6.35 million in gross proceeds from a private placement of its common stock and warrants to institutional and accredited investors.

Jan 5th, 2004

5 January 2004 San Diego, CA Lightwave -- Sorrento Networks Corp., supplier of optical networking equipment for carriers and enterprises worldwide, has closed its previously announced financing to raise $6.35 million in gross proceeds from a private placement of its common stock and warrants to institutional and accredited investors.

Sorrento intends to use the net proceeds for general corporate purposes, including working capital, and to strengthen its balance sheet for long-term growth.

In connection with the financing, Sorrento issued 2,140,101 new shares of Sorrento common stock and warrants to purchase 1,070,051 new shares of Sorrento's common stock. Investors received a warrant to purchase one share of common stock for each two shares of common stock purchased; the effective price in the private placement was $2.97 for each unit. Each unit consists of one share of common stock and a warrant to purchase one-half of a share of common stock. The warrants have an exercise period of five-years and an exercise price of $2.97 per share. The warrants are exercisable in cash, representing a potential $3.17 million in additional proceeds, bringing the total gross process of this offering to approximately $9.5 million, assuming the warrants are fully-exercised in cash. The warrants provide for cashless exercise under certain circumstances.

Neither the shares of common stock, the warrants sold to the investors, nor the shares of common stock to be issued upon exercise of the warrants have been registered under the Securities Act of 1933. Accordingly, these shares and warrants may not be offered or sold in the United States, except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act. Sorrento has agreed to file a registration statement covering resale by the investors of these shares and shares of common stock to be issued upon exercise of the warrants.

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