Struggling TranSwitch Corp. has gotten access to more badly needed capital, this time from a Chicago equity investor committed to pumping as much as $11 million into the Shelton maker of smartphone and tablet technology.
TranSwitch said Tuesday Aspire Capital Fund LLC pledged to buy its common stock over the next two years at prevailing market prices.
TranSwitch CEO M. Ali Khatibzadeh said Aspire intends to be a long-term stakeholder.
Immediately upon signing the agreement Monday, TranSwitch said Aspire bought an initial 990,099 shares of common stock for $1 million, a 5 percent discount to Friday’s closing price of $1.07. TranSwitch rose 26 cents, or 30 percent, in late morning Tuesday to $1.38.
With Aspire Capital on board, TranSwitch said it canceled its previous stock-sales pact with MLV & Co. LLC of Manhattan that was announced back in February.
In mid-May, TranSwitch privately sold 1.4 million shares, netting $2.7 million to fund ongoing operations.
The company said at the time the fresh funding will buy time until its latest smartphone and tablet technologies gain traction in the marketplace.
Last fall, TranSwitch undertook a restructuring, including layoffs, aimed at flattening the operating structure and trimming overhead by at least $3.2 million a year.
