AVENTURA,Fla., Sept. 16, 2005 (PRIMEZONE) -- Sun Network Group, Inc. (OTCBB:SNNW) (Frankfurt:WKN#570891) ("SNNW") files its June 30, 2005 quarterly report (Form 10-Q):
We recently filed a periodic report under Form 10-Q which indicates certain difficulties which delayed the filing. We wish to elaborate on these difficulties. The company filed its election to be governed as a business development company under Sections 55 through 65 of the Investment Company Act of 1940 and gave notification of its intent to sell its stock in a private placement under Form 1-E. In connection with a comment letter from the SEC, we determined that the Company has not made its status as an investment company known to the investment community and that certain actions, including our website and press releases might improperly suggest to the investment community that the Company continues as an operating company, contrary to the intention and design to become a business development company. For that reason, the Company intends to clarify its status and may re-file certain filings over the coming weeks to insure that its status as a business development company is properly described in those filings.
The company recognizes that, as a business development company, it is obligated to insure compliance with the requirements under the Investment Company Act of 1940, requirements which include a prohibition against the issuance of shares of its common stock for services. This question was raised by the SEC in their comment letter and has been discussed in phone conversations and the company has indicated to the SEC that it intends to investigate whether any of its shares issued in connection with the resignation of certain of its previous officers or directors could be considered to be shares issued for services. The Company has not yet determined whether any such shares were improperly issued or what actions might be required including but not limited to the rescission of the share transactions.
Present management is conducting a review of all previous transactions with the assistance of its independent auditors and outside counsel to determine if any of its actions were not fully in conformity with any of the rules or regulations in connection with the Investment Company Act of 1940. In connection with this review, certain controls will likely be adopted to insure future compliance and these will be explained in future filings. The company has not uncovered any financial irregularities nor do we believe that our controls regarding company assets, investments and financial information are inadequate but we are undertaking a review of all such controls. The Company has also sought guidance from the SEC as to the proper accounting methodology required in connection with its acquisition of Aventura Networks, LLC.
About Sun Network Group, Inc.
Sun Network Group, Inc. is a business development company governed under the Investment Company Act of 1940. Sun seeks out investment opportunities in early stage and developing companies. Our first portfolio investment since its election to become a BDC was Aventura Networks, LLC which operates a VoIP network and sells VoIP services. The Company is currently focused on increasing the value of its investment portfolio and looking for additional investments all with the goal of returning increased value to its shareholders. Sun Network Group, Inc. filed for a name change with the State of Florida on June 3, 2005 but has not consummated this change as the new name might not coincide with the Company's mission statement. Until such time as the Company files and receives acceptance of a new trading symbol from the NASD, the Company will continue to be known as Sun Network Group, Inc. for reporting purposes.
Safe Harbor
This press release may contain "forward-looking statements." Although Sun Network Group, Inc. believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Sun Network Group, Inc. assumes no obligation to update those statements to reflect actual results, changes in assumptions and other factors. The forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those projected. Additional information that could lead to material changes in performance is contained in filings with the Securities and Exchange Commission.