News and Events
eOn Announces Acquisition Option Agreement with Spark
ATLANTA (April 4, 2006) – eOn Communications Corporation™ (NASDAQ: EONC), a leading provider of telecommunications solutions, today announced it has executed an Acquisition Option Agreement (“Agreement”) to purchase 100% of Spark Technology Corporation (“Spark”).
Spark (www.sparktech.com) designs and markets accessories for wireless telephones. It recently announced Cellstik, a small memory device that allows the user to easily backup, enter, edit and transfer their cell phone contacts. Cellstik provides a unique solution for a growing problem in the cellular market. Spark is 97% owned by David Lee, eOn’s Chairman and CEO.
Under the terms of the Agreement, eOn will convert its existing $300,000 loan to 300,000 Spark shares and have the option to purchase all remaining outstanding Spark stock, including options, for 8,665,000 eOn shares. eOn will have the right to give notice of its intent to exercise this option any time between September 30, 2007 and March 31, 2008. The eOn Board of Directors will continue to review Spark operations and complete its due diligence process prior to granting approval of the option exercise. After notice of exercise, eOn will file an S4 with the SEC and seek the approval of the eOn Shareholders.
The Agreement further provides that in the event eOn does not exercise this option, or the eOn Shareholders do not approve it, eOn may require Spark or David Lee to repurchase the Spark shares for $300,000. In addition, in the event that Spark were to discontinue operations or be liquidated, David Lee would repurchase the shares for $300,000 within 60 days.
“To date the market response to CellStik has been very positive, and we believe Spark represents an exciting growth opportunity for eOn” stated Bob Dilworth, eOn board member and Chairman of eOn’s Audit Committee. “This Agreement is excellent for eOn, as it provides us the ability to monitor Spark’s early growth stages, protects our P&L from ramp-up losses and preserves our cash for other Company growth initiatives.”
Conference Call
The Company will host a conference call at 4:45 pm EDT, April 4, 2006, to discuss the Agreement. Shareholders and other interested parties are invited to listen to the call by dialing 800-289-0496. A web cast of the call will also be available through a link on the Company’s investor relations web site at investor.eoncc.com. Please log on 15 minutes in advance to download and install audio software if necessary. A replay of the call will be posted to our investor relations website shortly following the call.
About eOn Communications
eOn Communications Corporation™ is a global provider of innovative communications solutions. Backed by over 20 years of telecommunications engineering expertise, our solutions enable our customers to easily leverage advanced technologies in order to communicate more effectively. To find out more information about eOn Communications and its solutions, visit the World Wide Web at www.eoncommunications.com, or call 800-955-5321.
Note:
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including technical and competitive factors, which could cause the Company's results and the timing of certain events to differ materially from those discussed in the forward-looking statements. Such risks are detailed in eOn Communications Corporation's most recent Form 10-Q filing with the Securities and Exchange Commission.
eOn Communications Corporation, the mark eOn, and eQueue are trademarks of eOn Communications Corporation.
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