Gadzoox Networks –

SAN JOSE, Calif. – Gadzoox Networks Inc., a provider of products that connect computer systems to data storage devices, went public July 19, selling 3.5 million shares at $21 per share, above its $18 to $20 filing range.

The company’s venture investors include Seagate Technology Inc., New Enterprise Associates and ONSET Ventures.

Credit Suisse First Boston, Hambrecht & Quist and Morgan Keegan & Co. underwrote the offering, which left 24.59 million shares outstanding.

Gadzoox’s products allow computers to access larger amounts of data more quickly and reliably than previously possible. The company helped pioneer the development of storage area networks by taking the concept of connecting computers via local area networks and applying it to the connection of computers with data storage devices. Gadzoox technology has been endorsed and adopted by leading computer data storage companies such as Compaq Computer Corp., EMC Corp., Hewlett-Packard Co., IBM Corp. Seagate Technology and Sun Microsystems.

Proceeds from the offering, worth approximately $67.5 million, will be used for research & development of new products, sales channel development and other corporate purposes. The company will also invest in complementary businesses and technologies, as well as other interest-bearing securities.

Seagate Technology Chief Executive Stephen Luczo has been a member of the Gadzoox board of directors since June 1997. New Enterprise Associates General Partner Peter Morris joined the board in September 1996, as did ONSET Ventures General Partner Robert Kuhling.

Gadzoox Networks – Selected Financial

(in thousands, except per share data)

Year Ended March 31, Three Months Ended June 30,

1995 1996 1997 1998 1998 1998* 1999*

Total revenue – 104 823 9,811 24,821 5,406 9,211

Net income (loss) 310 -856 -2,089 -9,640 -15,932 -3545 -3236

Net income loss per share – – -.59 -2.41 -3.33 -.79 -.58