SAN MARCOS, Calif., Dec. 27, 2001 (PRIMEZONE) -- Global ePoint, Inc. (Global) (Nasdaq:GEPT) today announced that it has signed a letter of intent to merge with Fusion Telecommunications International, Inc. (Fusion). Global also announced that it has entered into a separate definitive agreement with Fusion to provide VoIP services in Southeast Asia.
The letter of intent regarding the proposed merger with Fusion provides that, if the merger is consummated, the current owners of Fusion would receive shares of Global's common stock. It is anticipated that the number of shares to be issued to Fusion shareholders would be equal to a percentage ownership of Global of between 65% to 75%, depending on a number of financial conditions. The merger is also subject to a number of other conditions, including the completion of a definitive agreement, approval by the companies' respective boards of directors and approval of the transaction by Global's shareholders. As such, there can be no assurance that Global will enter into a definitive agreement with Fusion, or that the merger will be consummated.
Separately, Global entered into an international service agreement with Fusion, pursuant to which the parties commenced a strategic partnership to provide VoIP services into a country in Southeast Asia. Global's obligations under the agreement relate primarily to financial matters, while Fusion's obligations relate primarily to providing the telecommunication services required for the country. The parties will share net profits equally from the venture.
Marvin Rosen, Fusion's Chief Executive Officer, commented, "We are excited about the opportunity to merge with Global ePoint. We anticipate Global ePoint's status as a Nasdaq National Market company will provide an additional presence that can help our launch into new market opportunities. We believe this will be important for Fusion since we anticipate accelerating Fusion's growth this coming year and moving forward with what we believe are tremendous new market opportunities. Global ePoint's additional assets, management and international relationships can not only assist us in our new market opportunities, they can significantly broaden our strategic plans."
Fusion is a specialized international communications service provider offering voice, Internet access and point-to-point private lines to corporate clients, communication carriers and Internet service providers (ISPs) in developing countries in Asia, Latin America and the Carribean. Today Fusion has operations in over ten countries within its target markets. In India, for example, Fusion is an alternative to the incumbent telecommunications provider and has, within the first eight months of operations, captured an estimated 30% share of the Internet access market for ISPs in India. For more information on Fusion, visit its Website at www.fusiontel.com.
Frederick Sandvick, Global's Chairman and Chief Executive Officer, commented, "We are very pleased to have negotiated what we believe will be a very synergistic merger opportunity for Global. Over the past year, we have set forth on a series of actions intended to transform Global and to strategically move forward with new market opportunities that can better enhance shareholder value. On June 1, 2001, we sold our core lottery business in order to provide us the liquidity and up front cash we required to proceed with our strategic initiatives. The sale of our lottery business was the first major step in Global's transformation process and the entry into a new market opportunity will be our second major step.
"Since June, we have been reviewing a number of merger and acquisition opportunities. We selected Fusion from those opportunities because we believe it not only provides our shareholders tremendous upside potential, it provides certain synergistic abilities to assist Global in maximizing its current asset values. Aside from the Company's cash and liquid assets, Global has over $3 million in card dispensing equipment that has been used for prepaid telephony, and Global has retained rights to proprietary designs for the world's first on-line activated instant lottery ticket. We believe, based on Fusion's management breadth and international relationships, that we will be better able to pursue the exploitation of both of those assets. We also believe that through our international contacts we will be able to assist Fusion in its strategic plans. All-in-all, the merger, if consummated, can be a complementary fit for both shareholder groups, providing potentially more upside then we could have otherwise respectively achieved on our own.
"In addition, we are also very pleased to have entered into a joint venture with Fusion to provide VoIP services to a country in Southeast Asia. We have already begun funding the venture and anticipate commencement of operations by the Spring of 2002.
"We look forward to reporting our progress as we move forward with our strategic plans in 2002."
About Global
Global has provided effective technologies for transaction automation since its formation in 1991. Global pioneered the development of the instant ticket vending machine for lotteries worldwide and has designed sold, leased and serviced high-security vending machines both domestically and internationally. In June 2001, Global sold its assets used in its existing lottery business, relating to the manufacture, sale, lease and service of instant lottery ticket vending machines. Global is now proceeding with plans to enter into new market opportunities.
Any forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Act of 1995. Investors are cautioned that actual results may differ substantially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, the successful completion of the proposed merger with Fusion, the necessity of equity raises, which may be required for Global to implement its plans to develop new market opportunities, continued acceptance of Global's products and services in the marketplace, competitive factors, new products and technological changes, Global's successful entry into new markets, a limited number of customers, political and other uncertainties and other risks detailed in Global's periodic filings with the Securities and Exchange Commission.