TORONTO, July 9, 2007 (PRIME NEWSWIRE) -- Wireless Age Communications, Inc. (OTCBB:WLSA) ("Wireless Age" or the "Company") today announced that revenues from continuing operations for the second quarter 2007 were approximately $7.4 million.
Year to date continuing operations revenues as of June 30, 2007 totaled approximately $13.4 million representing an increase of 23% over the prior year. Second quarter continuing operations revenues increased 26% year over year.
The Company will record a non-cash special accounting charge to income from the Newlook Industries Corp. settlement, in the order of $2 million, very similar in nature to the charge recorded for not achieving the earnings per share covenant during fiscal 2006. On June 29, 2007, Wireless Age and Newlook mutually agreed to a settlement and release whereby Wireless Age issued 26,638,267 restricted common shares to Newlook on the following basis:
-- 16,771,600 restricted common shares in exchange for the 4,192,900
Series A preferred shares,
-- 6,666,667 restricted common shares of in exchange for (i) the A
Warrants to purchase 5,000,000 common shares; and (ii) the B
Warrants to purchase 5,000,000 common shares,
-- 3,200,000 restricted common shares in settlement of liquidated
damages arising from the composition of Wireless Age's Board.
Management believes that the 2007 operating performance targets were unlikely to be met. The effect of this was that the Series A preferred shares would convert into 16,771,600 common shares.
The exercise price of the A and B warrants dropped from $0.125 to $0.0625 per share and from $0.25 to $0.125 per share, respectively. Management valued the A and B warrants, at the lower exercise prices, using a Black Scholes valuation model and agreed to issue restricted shares at current market prices in the amount of the valuation.
The board composition breach (since February 4, 2007 the board of directors did not consist of a majority of independent directors) provided that Newlook would receive cash or preferred stock, at their option. The dollar amount of preferred stock issuable was $112,000 which was currently convertible into common at $0.07 per share (or 1,600,000 common shares.) By agreeing the Company was unlikely to achieve the fiscal 2007 operating performance covenant the conversion rate dropped to $0.035 per and 3,200,0000 common shares were issuable.
Due to the formal bankruptcy of mmwave prior to June 30th, the Company will record a gain from "disposal" of the bankrupt entity. Management believes that the disposal gain will exceed the amount of the non-cash special charge resulting in a net gain for the quarter. This in addition to a good operating profit should give the Company positive earnings per share for the first half of fiscal 2007.
Wireless Age Chairman and CEO John Simmonds commented, "The Company had a very strong second quarter. Continuing operations again posted solid results. There will be, however, several complicated accounting issues, arising from the Newlook settlement and the mmwave bankruptcy that will have to be sorted out prior to the release of our second quarter report. In addition, and probably more significantly, Newlook became the Company's controlling shareholder during the quarter. We believe that the Company and Newlook management will work closely together to advance the Company."
Note: This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on currently available competitive, financial and economic data and management's views and assumptions regarding future events. Such forward-looking statements are inherently uncertain. Wireless Age Communications, Inc. cannot provide assurances that the matters described in this press release will be successfully completed or that the company will realize the anticipated benefits of any transaction. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to: global economic and market conditions; the war on terrorism and the potential for war or other hostilities in other parts of the world; the availability of financing and lines of credit; successful integration of acquired or merged businesses; changes in interest rates; management's ability to forecast revenues and control expenses, especially on a quarterly basis; unexpected decline in revenues without a corresponding and timely slowdown in expense growth; the company's ability to retain key management and employees; intense competition and the company's ability to meet demand at competitive prices and to continue to introduce new products and new versions of existing products that keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance; relationships with significant suppliers and customers; as well as other risks and uncertainties, including but not limited to those detailed from time to time in Wireless Age Communications, Inc. SEC filings. Wireless Age Communications, Inc. undertakes no obligation to update information contained in this release. For further information regarding risks and uncertainties associated with Wireless Age Communications, Inc.'s business, please refer to the risks and uncertainties detailed from time to time in Wireless Age Communications, Inc.'s SEC filings.