OREM, Utah--(BUSINESS WIRE)--Aug. 10, 2005--iMergent,
Inc. (AMEX:
IIG -
News):
- Receives Letter of Intent for Sale of International
Receivables for $5.2 Million
- Accounts Receivables Sales to Total $20.5 Million
- Transactions Expected to Create NOL for $16 Million to Offset
Taxable Income
- Announces Financing Agreement for Ongoing Sale of Domestic
Trade Receivables
iMergent, Inc., (AMEX:IIG - News) a leading
provider of eCommerce and software for small businesses and
entrepreneurs, announced the sale of its domestic trade receivables
portfolio of $15.3 million. The sale was priced at 100 percent of
net book value, less seven percent for transaction costs and service
fees associated with the transaction. Separately, other trade
receivables of $2.7 million in net book value as of June 30, 2005,
have also been or will be converted to cash. The company has
received a Letter of Intent for the sale of its international
receivables portfolio on similar terms that is expected to result in
the receipt of an additional $5.2 million in cash. Transaction costs
and service fees for both of these transactions are anticipated to
range from $1.6 million to $1.8 million and are recognized upon
consummation of the transactions.
In addition, iMergent entered into an agreement for the ongoing
sale of its domestic receivables. Upon consummation of all of these
transactions, it is anticipated that the company will no longer
incur fees for the servicing of accounts receivable that have
historically been recorded in general and administrative expenses.
"These transactions consummate months of work and will contribute
significant capital to invest in operating activities," said Rob
Lewis, iMergent's chief financial officer. "In addition, under the
terms of our agreement we will be selling our domestic trade
receivables on an ongoing basis as part of our strategy to direct
financial resources to our core business and other opportunities
that the board may explore."
Lewis continued, "By minimizing the amount of trade receivables
on the balance sheet, we achieve greater liquidity and maintain
added financial flexibility. These transactions are also expected to
result in the creation of a net operating loss carry forward (NOL)
of approximately $16 million, which can be utilized to offset
current and future taxable income. Prior to the sale of our
receivables, the tax benefits for bad debts could only be utilized
in the periods in which the receivables were written-off. These
transactions are expected to bring future cash tax benefits from bad
debt write-offs into earlier periods and eliminate or minimize cash
income tax expense until the benefits are fully utilized."
Don Danks, iMergent's chairman and chief executive officer,
stated, "With the sale of our trade receivables portfolio resulting
in a stronger cash position, I will make recommendations to the
board regarding exploring potential uses of this cash infusion for
the benefit of the shareholders which may include accretive
acquisitions and/or a stock buy back program."
In a separate news release today, iMergent announced preliminary
fourth quarter and year 2005 fiscal results.
About iMergent
iMergent provides eCommerce solutions to entrepreneurs and small
businesses enabling them to market and sell their business product
or idea via the Internet. Headquartered in Orem, Utah, the company
sells its proprietary StoresOnline(TM) software and training
services, helping users build a successful Internet strategy to
market products, accept online orders, analyze marketing performance
and manage pricing and customers. In connection with software,
iMergent offers site development, web hosting, marketing and
mentoring products. iMergent typically reaches its target audience
through a concentrated direct marketing effort to fill Preview
Sessions, in which a StoresOnline expert reviews the product
opportunities and costs. These sessions lead to a follow-up Workshop
Conference, where product and technology experts train potential
users on the software and encourage them to make purchases.
iMergent, Inc. and StoresOnline are trademarks of iMergent, Inc.
Safe Harbor Statement
Statements made in this press release that are not historical in
nature constitute forward-looking statements within the meaning of
the Safe Harbor Provision of the Private Securities Litigation
Reform Act of 1995. Such statements are based on the current
expectations and beliefs of the management of iMergent and are
subject to a number of factors and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. Such risks and uncertainties include,
without limitation, the Company's continued ability to increase
revenue; the receivables being properly valued; trade receivables
having been converted having a proper net book value; the sale of
the international receivables being completed; the international
receivables being properly valued; the ability to sell ongoing
receivables under terms and conditions contemplated; significant
capital being contributed to the company; the ability to direct
financial resources to the core business of the company; achieving
greater liquidity; the ability to maintain added financial
flexibility; the ability to create forward NOLs; the ability to use
NOLs to offset future and current tax income; the continuation of
rapid growth of the company; the ability to generate future benefits
from bad debt write-offs; the ability to increase focus into the
core business of the company; the ability to meet the needs of
customers and provide services to small businesses and
entrepreneurs; the review and or use of proceeds for the benefit of
stockholders; the ability to provide merchants services which grow
their business; the Company's ability to attract and retain key
management and other personnel; the results of Class Action suits
filed; the company's resolution of the Texas proceeding; employees
complying with company policy and laws. For a more detailed
discussion of factors that affect iMergent's operating results,
please refer to its SEC reports including its most recent Form 10-K
and Form 10-Q. The company undertakes no obligation to update this
forward-looking information.
Contact: iMergent, Inc.
Rob Lewis, 801-431-4695
investor_relations@imergentinc.com
or
Lippert/Heilshorn & Assoc.
David Barnard, 415-433-3777 (Investor Relations)
David@lhai-sf.com
Kirsten Chapman, 415-433-3777 (Investor Relations)
Chenoa Taitt, 212-838-3777 (Media)
ctaitt@lhai.com
