Wherify Wireless Announces Letter of Intent to Merge with Lightyear Network Solutions
SAN MATEO, Calif., June 3 /PRNewswire-FirstCall/ -- Wherify Wireless, Inc. (BULLETIN BOARD: WFYW) , home of the award winning Wherifone GPS Locator Phone and the Springboard Location Based Services Platform, today announced that it has entered into a non-binding letter of intent with Lightyear Network Solutions, Inc. to merge its business into Wherify.
The proposed merger of Wherify and Lightyear would be conditioned on, among other things, negotiation and execution of a definitive agreement, approval of the merger by the shareholders of both companies, obtaining a minimum of $15 million in new equity capital and restructuring of existing debt. The letter of intent specifies that no more than $2.5 million of the new equity capital would be used to restructure Wherify's current unsecured liabilities (approximately $16 million) and $2.5 million of such equity capital would be used to restructure Wherify's secured debt with Yorkville Associates. The letter of intent contemplates that the combined company would retain approximately $2.5 million of secured debt with Yorkville Associates. After repayment of approximately $800,000 of expected new bridge indebtedness and payment of transaction expenses and associated legal fees, the combined company would have approximately, $6.5 million in working capital. Wherify has not yet obtained binding commitments for the bridge financing, equity financing or debt restructuring. There is also no guaranty or assurance that the final restructuring terms, if any, will not be materially different upon further negotiations and due diligence. Wherify, a pioneer in the rapidly emerging location based service business, is in the process of completing its proprietary location based service platform, Springboard. The Springboard platform is being designed to enable mobile communications carriers, mobile application providers and mobile device manufacturers to develop a wide array of location based services applications for their products, such as mobile social networking, mobile community search and shopping and fleet management. Springboard technology includes support of both GPS and non GPS equipped devices.
Lightyear, a closely-held private company, is a business and network service solutions company generating annual revenues in 2007 of approximately $65 million with an EBITDA of $2.2 million. Lightyear provides a host of telecom products and services for business and individual customers, including, among other things, integrated network access service for voice, data, private lines, VoIP services to over 4,000 business enterprise clients nationally. Sherman Henderson, Lightyear's President and CEO and the six-year incumbent chairman of COMPTEL, said, "Merging the unique location based services platform from Wherify with Lightyear's strong customer service focus, our potent multi-channel distribution network and our strong telecom industry relationships has the potential to geometrically enhance the combined company's business prospects." Vince Sheeran, Wherify's Chief Executive Officer, said, "Bringing together Wherify's proprietary location based service platform with Lightyear's established leadership in customer support, multi-channel distribution and carrier presence is an excellent fit. We believe the proposed merger of Wherify and Lightyear has the potential to unlock the unfulfilled promise that location based services have represented for the wireless industry." If the merger is completed as contemplated in the letter of intent, Mr. Henderson would be named the Chairman and CEO of Wherify, and Wherify would change its name to Lightyear Network Solutions. Under the present terms of the non binding letter of intent, Lightyear shareholders would receive approximately 51% of the pro-forma fully-diluted shares outstanding on the closing date of the merger and will have the right to choose 60% of the Board of Directors. To facilitate the combination, Yorkville Advisors and Wherify entered into a forbearance agreement on May 19, 2008 under which Yorkville Advisors agreed in principal to the terms of the letter of intent and to forbear from exercising its rights and remedies under its secured debenture with Wherify.
About Lightyear Network Solutions, LLC Lightyear Network Solutions, LLC was founded in 1993 when J. Sherman "Sherm" Henderson III began operations under the name of UniDial. Sherman Henderson was named one of the top 25 Most Influential People in Telecommunications and has been elected for six consecutive terms as Chairman of Comptel, the leading industry association representing communication service providers. Lightyear markets and sells telecommunication services to medium to small businesses and residential consumers primarily through independent agents and representatives throughout the United States. Lightyear built its own VoIP network in 2004 to enhance its product offerings to its customers. Lightyear has partnered with some of the biggest names in telecom including: Verizon, AT&T, Level 3, Qwest, Sprint, Embarq, PAETEC, Sylantro, Cisco, Adtran, Voicecom, Iperia and Acme Packet. Lightyear is located in Louisville, Kentucky. About Wherify Wireless, Inc. Wherify Wireless, Inc. (BULLETIN BOARD: WFYW) is a pioneering developer of personal location products and services. With patented personal location and position tracking technology and patent pending GPS locator communications capability, Wherify Wireless continues to be a leader in location technology development. Wherify's Aided-GPS location has been integrated into more than 100 GSM cellular networks world-wide. Wherify's expertise in GPS technology for wireless devices and its patented back-end location service engine enable customers to obtain real-time location information on individuals and property directly through the Internet or any phone. The Smithsonian Institution Museum has recognized Wherify's groundbreaking first product, the Child Locator, by putting it on permanent display as the world's first commercial personal GPS tracking device. In 2007, Wherify's Wherifone(TM) received the Consumer Electronic Show's Award for Excellence in Innovation in Wireless Communications. Wherify was founded in 1998, and is located in San Mateo, California. Note Regarding Forward-Looking Statements This news release contains forward-looking statements relating to Wherify Wireless and Lightyear and their products that are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," "estimates" and similar expressions) should be considered to be forward-looking statements. There are a number of factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the ability of parties to reach agreement on material terms, general conditions in the relevant industries and markets, the impact of competitive products, intellectual property issues and the other factors described in Wherify Wireless' periodic filings with the SEC. The company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release. Wherify and Wherify Wireless are registered trademarks of Wherify Wireless, Inc. Wherifone is a trademark of Wherify Wireless, Inc. All other trademarks are the property of their respective owners. Contact: Joe Noel
CONTACT: Joe Noel, Wherify Investor Relations, +1-925-922-2560
2008-06-03 14:06:22 0376503 PRNEWSWIRE
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