VoIP Inc. Completes First Restructuring Phase

By Cindy Waxer

TMCnet Contributing Editor

 

In an effort to improve its balance sheet and enhance operating results, VoIP, Inc., a provider of VoIP communications solutions for service providers, resellers and consumers, announced today that it has completed the first phase of its restructuring, streamlining operations, reducing its overall level of indebtedness and raising additional capital.

For starters, VoIP Inc. (News - Alert) has terminated its marketing and distribution agreement with Phone House, Inc., under which it was responsible for the wholesale distribution, marketing and selling of prepaid telephone calling cards by Phone House, Inc. This business was based in the southern California area, was non-core to its VoIP business and consistently produced losses. VoIP Inc. anticipates that by terminating this business it will reduce annual operating expenses significantly.

The company also entered into an agreement with certain investors where they converted approximately $7 million in debentures into common stock, and separately raised $2.3 million via a private placement, providing working capital for the continued development and marketing of its VoiceOne suite of services.


“We believe these initiatives have positioned the Company well to capitalize on the many promising opportunities available for our unique VoIP technology offerings,” said Anthony J. Cataldo VoIP, Inc.’s chairman and CEO. “Interest in our innovative VoIP technology platform Click4Me has been increasing rapidly, as demonstrated by the interest in our technology by leading Internet companies, and the use of our patented Click-To-Call technology in high-profile entertainment programming. We remain confident that the combination of our improved financial position along with growing interest from leading companies in our Click-To-Call technology and services will support strong future growth.”

In May 2004, VoIP, Inc.’s network minutes were approximately 100,000/month. They jumped to more than 250,000,000/month after the company acquired Volo Communications and the VoiceOne network in June 2005, both of which were developed and founded by Shawn Lewis. In November 2005, after VoIP, Inc. acquired WQN, an international pre-paid phone card company, the company’s 2005 annual usage surged to 3.6 billion.

--------

Cindy Waxer is a Toronto-based freelance journalist specializing in business and technology. She has written for publications including TIME, Fortune Small Business, Business 2.0, Computerworld, Canadian Business, and Workforce Management. To see more of her articles, please visit Cindy Waxer’s columnist page.