LOUISVILLE, KY, July 2, 2010 - Lightyear Network Solutions, Inc. (OTCBB:LYNS, news, filings), a provider of telecommunication services to large, medium and small businesses, as well as residential consumers throughout North America, today
announces an agreement to acquire the business assets of SouthEast Telephone, Inc., a Kentucky-based telecommunications company.
On June 30, 2010, Lightyear Network Solutions, Inc. (the "Company") and its wholly-owned subsidiary, SE Acquisitions, LLC ("SE Acquisitions"), a Kentucky limited liability company, entered into an Asset Purchase Agreement (the "Agreement") with Southeast Telephone, Inc. ("Seller"), a Kentucky corporation. Seller had previously filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Kentucky, Pikeville Division. Seller provides voice and data telecommunications products and services, including local and long distance phone service, DSL and paging, to primarily residential customers. Seller's 2009 revenue was approximately $37.5 million. Seller currently has approximately 150 employees and approximately 33,000 customers.
Pursuant to the Agreement, SE Acquisitions has agreed to purchase substantially all of the real property, intellectual property, tangible assets, and selected vendor contracts used in the conduct of Seller's business, and to assume certain post-closing liabilities related to the purchased assets. Seller will retain certain liabilities related to its business. SE Acquisitions has the right under the Agreement to designate additional assets or liabilities of Seller to be included in the Agreement. In consideration of the purchased assets, SE Acquisitions will pay: (i) up to $560,000 in cash to Seller for Seller's administrative and priority expenses; (ii) $4,000 in cash for each of Seller's employees who are not offered employment with the Company; and, (iii) an aggregate of 200,000 shares of Company common stock, par value $0.001 per share, to Seller's equity holders. SE Acquisitions will also assume approximately $3,765,000 of Seller's secured debt and expects to provide a minimum of $2,000,000 in investment capital, post closing, to fund working capital needs and network expansion.
The Agreement contains customary representations and warranties of the parties. The asset purchase transaction is expected to close on or about October 1, 2010, subject to fulfillment or waiver of certain conditions to closing, including financing, regulatory approvals, and approval by and an order of the Bankruptcy Court under sections 363 and 365 of the Bankruptcy Code. This summary is subject in its entirety to the terms and conditions of the Agreement, a copy of which is attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K dated July 1, 2010.
About Lightyear Network Solutions, Inc.
Through its wholly owned subsidiary, Lightyear Network Solutions, LLC, Lightyear provides telecommunication services to large, medium and small businesses and to residential consumers throughout North America utilizing its extensive network of independent agents and representatives. J. Sherman Henderson III, Lightyear’s Chief Executive Officer, has nearly 25 years experience in the telecommunications industry. Henderson was named one of the Top 25 Most Influential People in Telecommunications and was elected for six consecutive terms as Chairman of COMPTEL, the leading industry association representing more than 250 service providers. Lightyear’s product and service offerings include: local PRI and digital T1, enhanced internet services, frame relay, MPLS, Point-to-Point, Voice over Internet Protocol (VoIP), local and long distance, calling cards, and conferencing. Lightyear has also begun offering wireless services to customers in the U.S. through wholesale contracts with multiple wireless voice and data service providers. Lightyear built its own VoIP network in 2004 to enhance its product offerings to its customers and has partnered with some of the most prominent names in telecom including: Sprint, Verizon, AT&T, Qwest, Level 3, PAETEC, CenturyLink, Intelliverse, Globys BroadSoft, Cisco and Adtran. Lightyear Network Solutions is headquartered in Louisville, KY. Additional information can be found at: www.lightyear.net.
This press release contains "forward-looking statements" for purposes of the Securities and Exchange Commission's "safe harbor" provisions under the Private Securities Litigation Reform Act of 1995 and Rule 3b-6 under the Securities Exchange Act of 1934. These forward-looking statements are subject to various risks and uncertainties that could cause Lightyear’s actual results to differ materially from those currently anticipated. These forward-looking statements may include, without limitation, statements about our marketing and acquisition opportunities, business strategies, competition, expected activities and expenditures as we pursue our business plan. Although we believe that the expectations reflected in any forward looking statements are reasonable, the risks and uncertainties which could cause our actual results to differ materially from those currently anticipated includes changes in market conditions, our ability to integrate acquired operations, the ability to obtain additional financing on satisfactory terms, customer acceptance of products, regulatory issues, competitive factors, or other business circumstances and risk factors described in our filings with the Securities and Exchange Commission. Lightyear undertakes no obligation to revise or update any forwardlooking statements in order to reflect events or circumstances that may arise after the date of this press release.
Porter, LeVay & Rose, Inc.
Marlon Nurse, V.P. – Investor Relations
Trilogy Capital Partners
Darren Minton, President