VANCOUVER, June 6 /CNW/ - Ignition Point Technologies Corp. (TSX-V: IPN),
a Vancouver-based broadband communications company, today announced financial
results for its second quarter ended March 31, 2008. Ignition Point's 68.6%
owned operating subsidiary is TeraSpan Networks Inc. All revenues and expenses
reported by the Company, with the exception of Ignition Point's debenture
interest expense and public company costs relate to the operations of
Total revenue for the second quarter ended March 31, 2008 was $1,903,267
compared to $615,147 for the comparable quarter of fiscal 2007. Second quarter
revenues included approximately $1.2 million from the sale of dark fiber
network assets to Shaw Cablesystems as part of a $2.5M contract entered into
in July 2007. The Company's gross margin improved in the 2008 period due
primarily to the dark fiber sale to Shaw Cablesystems and increased product
sales relative to network sales in the quarter.
The Company's net loss from continuing operations for the second quarter
of 2008 was $209,998 ($0.03 per share) compared to $745,196 ($0.10 per share)
for the second quarter of 2007. The Company's net loss from continuing
operations was reduced in the 2008 period as the result of revenue recognized
related to the sale of dark fiber network assets to Shaw Cablesystems.
Liquidity and Subsequent Event
At March 31, 2008 consolidated cash and cash equivalents totaled $365,431
which represents a cash value of $0.05 per share. At December 31, 2007
consolidated cash and cash equivalents totaled $114,754, representing a cash
value of $0.02 per share. The Company's working capital at March 31, 2008 was
a deficit of $1,873,366, compared to a surplus of $424,410 at December 31,
2007. The working capital deficit results from the classification of
debentures maturing March 2009, with a liability balance of $2,171,019, as
current liabilities on the balance sheet.
Both Ignition Point's and TeraSpan's cash resources are very limited and
both require additional debt or equity financing to meet their immediate
liquidity requirements. Ignition Point has been unable to secure this
financing. On May 30, 2008 Ignition Point agreed in principle to a proposal to
finance and financially restructure its subsidiary TeraSpan Networks Inc. (the
The TeraSpan Refinancing contemplates that a group of investors (the
"Investors"), the majority of whom are holders of Ignition Point's Debentures,
will lend up to $612,500 in aggregate to TeraSpan under debentures (the "New
Debentures") bearing interest at 15% and maturing two years from the date of
issue. The New Debentures will be convertible into common shares of TeraSpan
at the option of the holders at any time and in certain circumstances, at the
option of TeraSpan. Additional information relating to the TeraSpan
Refinancing is contained in Ignition Point's news release of June 2, 2008.
Further, Ignition Point is indebted in the aggregate principal amount of
$2,500,000, with interest at 15% ("Ignition Point's Debentures"), is in
default of its interest payment obligations under this debt and lacks the
liquidity required to make any further interest payments. The TeraSpan
Refinancing will not rectify this default nor address Ignition Point's
inability to pay its trade payables. The holders of Ignition Point's
Debentures have not taken action to enforce the debentures, nor have they
called a meeting of creditors to enforce them. The Company is considering its
options in relation to its debenture and payables obligations.
About Ignition Point
Ignition Point Technologies Corp. (TSX-V:IPN) is a Vancouver-based
broadband communications company providing innovative solutions to expand
connectivity to public and private networks. Ignition Point's 68.6% owned
operating subsidiary is TeraSpan Networks Inc. www.teraspan.com. For more
information, visit www.ignitionpoint.ca.
The Company's financial results are stated in Canadian dollars and are
prepared in accordance with Canadian generally accepted accounting standards.
Complete financials are available at www.sedar.com.
This news release contains certain statements that may be deemed
"forward-looking statements". All statements in this release, other than
statements of historical fact, that address events or developments that the
company expects to occur, are forward looking statements.
Forward looking statements are statements that are not historical facts
and are generally, but not always, identified by the words "expects", "plans",
"anticipates", "believes", "intends", "estimates", "projects", "potential" and
similar expressions, or that events or conditions "will", "would", "may",
"could" or "should" occur. Although the company believes the expectations
expressed in such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and
actual results may differ materially from those in forward looking statements.
Factors that could cause the actual results to differ materially from those in
forward-looking statements include market prices, continued availability of
capital and financing and general economic, market or business conditions.
Investors are cautioned that any such statements are not guarantees of future
performance and actual results or developments may differ materially from
those projected in the forward-looking statements. Forward looking statements
are based on the beliefs, estimates and opinions of the company's management
on the date the statements are made. The Company undertakes no obligation to
update these forward-looking statements in the event that management's
beliefs, estimates or opinions, or other factors, should change except as
required by law.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this news release.
For further information:
For further information: Press Contact: Elena Kinakin, Chief Financial
Officer, Ignition Point Technologies Corp., Phone: (604) 634-5484