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CounterPath to Acquire NewHeights |
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Written by PRESS RELEASE
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Tuesday, 19 June 2007 |
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Page 2 of 3
Following the completion of the transaction, the combined company will initially focus on
integrating the sales, marketing and development teams, consolidating and strengthening softclient and softphone offerings and further commercializing its server solutions. The new
products will be made available to CounterPath's list of more than 250 customers across 50
countries as well as to new customers in the service provider, OEM (Original Equipment
Manufacturer) and enterprise sectors. CounterPath's roster of customers includes Adtran,
Alcatel-Lucent, AT&T, BT (British Telecom), Cisco Systems, Deutsche Telekom, Portugal
Telecom and Vonage.
"By bringing together the unique strengths of each company, this transaction accelerates our
respective growth strategies," said Greg Pelling. "CounterPath's VoIP applications are
recognized as the leading SIP-based softphones in the industry today. By layering on
enterprise software and features, we believe we can offer an attractive solution to the rapidly
growing IP communications market."
Fiscal details related to the acquisition
CounterPath will acquire all of the shares of NewHeights through the issuance of 40,250,000
shares of CounterPath's common stock to shareholders of NewHeights (NewHeights
shareholders who are Canadian residents may, in lieu of receiving shares of CounterPath
common stock, elect to receive shares exchangeable into CounterPath shares in order to defer
taxable income or gains).
Immediately prior to closing, NewHeights will be debt free and have $2.5 million in cash to contribute to the combined entities. Wesley Clover has irrevocably committed a further $3.5 million to be invested over a seven month period for 8,750,000 shares of common stock bringing the total cash contribution to CounterPath by NewHeights and Wesley Clover to $6 million. Upon closing, CounterPath's convertible debenture holders have agreed to convert their existing debentures in the amount of $4 million and invest a further $2 million for 15,000,000 shares of common stock at $0.40 per share.
At closing, CounterPath expects to be debt free, and have an additional $8 million of new cash
or cash commitments. Following the investments of the convertible debenture holders and
Wesley Clover, CounterPath expects that there will be a total of 101,940,983 shares of common stock outstanding (including shares exchangeable into CounterPath shares). The closing of the transaction contemplated by the definitive agreement is subject to various conditions, including approval by NewHeights' securityholders, court approval and other customary closing conditions. The transaction is expected to close within 60 days.
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