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Newsroom - Clients - TLPE
The following news and investment research items reflect some of the recent business activity for selected clients of Empire Relations Group, Inc. Additional information for investment research can be found in the featured clients section. News and investment research are for informational purposes only.
TelePlus Enterprises, Inc.
TelePlus Strengthens Balance Sheet by Negotiating Significant Debt Reduction and a Reduction of Short Term Debt Obligations
Company Delivers $1.875M Balloon Payment Due August 1st to Telizon Shareholders
MONTREAL--(MARKET WIRE)--Aug 2, 2006 -- TelePlus Enterprises, Inc. (OTC BB:TLPE.OB - News) (Frankfurt:YT3.F - News) (www.teleplus.ca) ("TelePlus" or the "Company") announced today that it renegotiated for $3.2M of the Company's $18.6M earn-out obligation associated with the acquisition of Keda Consulting Inc. ("Keda") (acquired in April 2005) and on August 1st, 2006 made a balloon payment of $1.875M due to the former shareholders of Telizon, Inc. ("Telizon") (acquired in July 2006).
DEBT REDUCTION:
Pursuant to a share purchase agreement signed in April 2005 the total compensation to be paid by the Company for the Keda purchase was to reach up to $18.6M subject to the achievement of certain EBITDA targets. Management renegotiated this amount by offering as full and final compensation under said share purchase agreement $3.2M to the former Keda shareholders. Benefits of this transaction will immediately be seen on the Company's balance sheet. Earlier this year, the Company had accrued, based on achieved EBITDA targets, $4.1M in Keda debt and would have been required to accrue additional debt based on additional EBITDA targets earned. The $4.1M debt will now be reduced by over $800k to $3.2M pursuant to the amended Keda agreement and all future earn-outs to the former Keda shareholders have been eliminated. The elimination of debt and earn-outs significantly strengthens the Company's balance sheet. The amended Keda terms are to be paid over 60 months in equal monthly installments of $53.5K. Payments will be made from cash on hand thus creating no dilution to current shareholders.
BALLOON PAYMENT:
The Company also paid to the previous shareholders of Telizon Inc. a $1.875M balloon payment which was due August 1st of this year. To make the balloon payment, TelePlus obtained a $3,000,000 loan from Cornell Capital Partners LLP ("Cornell"). Such loan matures in 3 years and bears an annual interest rate of 10%. The proceeds of the Cornell funding have been used to make the balloon payment and for general working capital. The Company intends to repay this debt through cash flow by making $100,000 monthly payments starting in March 2007 as stated in the Cornell loan documents. Cash payments will not create dilution to current shareholders. As part of the transaction, the Company is not required to file any SB2 registration unless requested by Cornell.
For full details on these transactions, investors are invited to view the Company's 8-K filed August 1, 2006.
TelePlus CEO Marius Silvasan commented, "We have crossed an important milestone today. The debt reduction, elimination of earn-out and funding the balloon payment considerably strengthens our balance sheet by reducing our overall debt and improving our Current Assets to Liabilities ratio. The availability to access the funds from Cornell to take advantage of settling an outstanding obligation at a considerable discount was an extraordinary opportunity. We appreciate Cornell's consideration and assistance in accomplishing the debt restructuring and reduction. Furthermore, this new agreement will have a positive impact on future cash flows as we have capped our earn-out obligation. We intend to use this cash flow to fuel additional growth and the option to reduce our remaining debt. More importantly, TelePlus does not intend to issue shares as part of these transactions, hence there will be no dilution to current shareholders."
About TelePlus Enterprises, Inc. (OTC BB:TLPE.OB - News) http://www.teleplus.ca
TelePlus Enterprises, Inc. ("TelePlus") is a diversified North American telecommunications company with offices in Miami, Florida; Cleveland, Ohio; Montreal, Quebec; and Barrie, Ontario. TelePlus was founded in 1999 and it has since become a leading provider of wireless and telecommunications products and services across the U.S.A. and Canada. In October 2003, TelePlus became a publicly traded Company on the OTCBB under the symbol TLPE and since then it has continued to grow organically and through strategic acquisitions. The company's wholly owned subsidiaries include TelePlus Wireless, Corp. which operates a prepaid MVNO (Mobile Virtual Network Operator) under the Liberty Wireless brand; Maximo Impact, Corp. which operates a pay-as-you-go MVNO under the MX Mobile brand and TelePlus Connect, Corp. which resells landline, long distance and internet services under the Telizon, Freedom and Liberty brands. The company's websites include www.libertywireless.com, www.vivaliberty.com, www.maximoimpact.com and www.telizon.biz among others.
The statements which are not historical facts contained in this press release are forward-looking statements that involve certain risks and uncertainties, including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, development and acquisition of new product lines and services, government approval processes, the impact of competitive products or pricing from technological changes, the effect of economic conditions and other uncertainties, and the risk factors set forth from time to time in the Company's SEC reports, including but not limited to its annual report on Form 10-KSB; its quarterly reports on Forms 10-QSB; and any reports on Form 8-K. TelePlus Enterprises, Inc. takes no obligation to update or correct forward-looking statements.
To view the most recent video interview with CEO, please visit:
http://www.teleplus.ca/download/18teleplus.wmv
To view the Wall Street Research Report & Analyst Interview, please visit
Interview: http://www.teleplus.ca/download/TLPEAnalyst.wmv
Report: http://www.wallstreetresearch.org/reports/tlpe.htm
To view our most recent Investology research report, please visit
http://www.teleplus.ca/download/TLPEUPDATE17April06-Final.pdf
Listen to our Q1 webcast at:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1453540
To view the CEO interview on the floor of the AMEX, please visit
http://www.teleplus.ca/download/TLPE.wmv
To view the most recent trader's report on TelePlus, please visit
http://www.teleplus.ca/download/TLPEtrader.wmv
TelePlus Enterprises, Inc.
Investor Relations & Corporate Communications
866-699-3388 ext 222
investorrelation@teleplus.ca
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