Tegal Corporation (NASDAQ: TGAL) today announced the closing of a transaction to acquire CollabRx, Inc., a privately held technology company in the rapidly growing market of interpretive content and data analytics for genomics-based medicine.

Tegal will issue 236,433 shares of common stock, representing 14% of Tegal’s total shares outstanding prior to the closing, to former CollabRx stockholders in exchange for 100% of the capital stock of CollabRx, Inc. Tegal and certain former CollabRx stockholders entered into a Stockholders Agreement providing for, among other things, registration rights, transfer restrictions and voting and standstill agreements. Tegal also assumed $500,000 of existing CollabRx indebtedness through the issuance of 5-year promissory notes in substitution for outstanding notes previously issued by CollabRx.

The Chief Executive Officers of the two constituent companies, Thomas Mika of Tegal and James Karis of CollabRx, plan to serve as co-CEOs of the combined, publicly traded company, with headquarters in San Francisco, CA. In connection with the closing, Mr. Karis was also appointed to Tegal’s Board of Directors. Tegal will continue to operate under its current name and ticker symbol for the time being, but plans to seek stockholder approval at its upcoming annual meeting in September 2012 for an amendment to its Certificate of Incorporation, changing its corporate name to CollabRx, Inc.

Tegal previously announced that, in connection with the transaction, it would grant a total of 368,417 restricted stock units (RSUs) and options as inducement grants to newly hired management and employees, all subject to four-year vesting and other restrictions. Mr. Karis’ inducement award consists of RSUs covering 239,417 shares of common stock. 23,921 of the RSUs vested immediately upon grant, 17,970 additional RSUs will vest on each 9-month anniversary and 12-month anniversary of the closing and 14,963 RSUs will vest each quarter thereafter, in each case subject to Mr. Karis’ continued status as a service provider on each applicable vesting date. Notwithstanding the foregoing, if Mr. Karis’ employment with Tegal is terminated by Tegal other than for “cause” or by Mr. Karis for “good reason” (each as defined in Mr. Karis’ Employment Agreement with Tegal) on or after the second anniversary of the closing, 29,926 additional RSUs will immediately vest. Furthermore, if Mr. Karis’ employment with Tegal is terminated by Tegal other than for cause or by Mr. Karis for good reason within 3 months before or 12 months after a “change of control” (as defined in Mr. Karis’ Employment Agreement with Tegal), all of the RSUs will immediately vest. In addition, Tegal granted non-qualified stock options to purchase an aggregate of 129,000 shares of common stock to seven additional former employees of CollabRx joining Tegal in connection with the transaction. The options have a term of 10 years and an exercise price of $3.94 per share, which was the closing price of Tegal’s common stock on the Nasdaq Capital Market on July 12, 2012. 10% of the options vested immediately upon grant, 15% of the options will vest on the first anniversary of the closing and 1/48 of the options will vest on the last day of each month thereafter, in each case subject to the applicable employee’s continued status as a service provider on each applicable vesting date. The inducement grants were approved by a majority of Tegal’s independent directors in accordance with Nasdaq Listing Rule 5635(c)(4).

CollabRx offers cloud-based expert systems that provide clinically relevant interpretive knowledge to institutions, physicians, researchers and patients for genomics-based medicine in cancer and other diseases to inform health care decision making. With access to approximately 50 clinical and scientific advisors at leading academic institutions and a suite of tools and processes that combine artificial intelligence-based analytics with proprietary interpretive content, the company is well positioned to participate in the $300 billion value-added “big data” opportunity in the U.S. health care market (as reported by McKinsey Global Institute), over half of which specifically targets areas in cancer and cancer genomics.1

CollabRx Therapy Finders™ are web-based apps that serve as one type of user interface to access proprietary CollabRx content. CollabRx content is dynamically updated and organized in a knowledgebase that includes information on molecular diagnostics, medical tests, clinical trials, drugs, biologics and other information relevant for cancer treatment planning. Capturing how highly respected practicing physicians use this information in the clinical setting further refines the knowledgebase.

About Tegal

Since its founding in 1972, Tegal Corporation has been dedicated to the development and application of emerging technologies. For 40 years, Tegal’s process and equipment know-how has been incorporated in devices fabricated by some of the world’s leading semiconductor and MEMS companies, including Tegal’s one-time parent, Motorola. Now entering its fifth decade, Tegal has committed its future to emerging technologies in medical devices and health care. Tegal is currently headquartered in Petaluma, California. Please visit us on the web at www.tegal.com.

About CollabRx

CollabRx is a recognized leader in “cloud-based” expert systems to inform health care decision-making. CollabRx uses information technology to aggregate and contextualize the world's knowledge on genomics-based medicine with specific insights from the nation's top cancer experts starting with the area of greatest need: advanced cancers in patients who have effectively exhausted the standard of care.

Safe Harbor Statement

This press release contains forward-looking statements that may include statements regarding the intent, belief or current expectations of Tegal, CollabRx and their respective management. Forward looking statements include statements about the benefits and advantages of the acquisition for Tegal and CollabRx. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of important factors, including but not limited to risks and uncertainties related to Tegal’s ability to integrate CollabRx successfully, the risk that the anticipated benefits from the acquisition may not be fully realized or may take longer to realize than expected; and competition and its effect on the combined company’s performance. Additional factors that may affect future results are contained in the SEC filings for Tegal, including but not limited to Tegal’s Annual Report on Form 10-K for the year ended March 31, 2012. Tegal and CollabRx each disclaim any obligation to update and revise statements contained in this release based on new information or otherwise.

1 “Big data: The next frontier for innovation, competition and productivity”, McKinsey Global Institute, May 2011

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