EASY Easylink Services Corp CL A (MM)

EasyLink Services Corporation (NASDAQ: EASY), a leading global provider of outsourced business process automation services that transform manual and paper-based business processes into efficient electronic ones, today announced that its annual report on Form 10-K for the year ended December 31, 2005 has been filed with the Securities and Exchange Commission. The Company previously announced its 2005 year end results on February 28, 2006. The company has made two adjustments to the financial statements included in that release which are reflected in the 10-K filed on March 31, 2006 resulting in an improvement to net income and a reclassification of debt on our balance sheet. -- We adjusted cost of service down by $194,000 to reflect the correction of an adjusting entry in cost of service from one of our international subsidiaries. This resulted in an improvement of $194,000 in operating income and net income for fourth quarter and full year 2005. -- We reclassified $4.2 million of debt from a long term liability to a current liability in the consolidated balance sheet as of December 31, 2005. This adjustment reflects the fact that the Company has not yet completed the additional financing previously announced, which is required to be completed by May 1, 2006. In addition, notwithstanding the significant improvements in EasyLink's financial condition and results of operations over the past four years, the Company has again received a going concern qualification from its auditors. The Company also received a going concern qualification from its auditors for each of the years commencing December 31, 2000 through 2004. This announcement is made in compliance with Nasdaq Rule 4350(b), which requires disclosure of receipt of an audit opinion that contains a going concern qualification. Thomas Murawski, President and Chief Executive Officer of EasyLink said: "As we have over the past four years, we will continue to manage expenses while investing for growth to ensure the long term success of the Company." The company further disclosed in its 10-K that it had already obtained letters of intent for $4.3 million of a proposed $5.4 million common stock financing. About EasyLink Services Corporation: EasyLink Services Corporation (NASDAQ: EASY), headquartered in Piscataway, New Jersey, is a leading global provider of outsourced business process automation services that enable medium and large enterprises, including 60 of the Fortune 100, to improve productivity and competitiveness by transforming manual and paper-based business processes into efficient electronic business processes. EasyLink is integral to the movement of information, money, materials, products, and people in the global economy, dramatically improving the flow of data and documents for mission-critical business processes such as client communications via invoices, statements and confirmations, insurance claims, purchasing, shipping and payments. Driven by the discipline of Six Sigma Quality, EasyLink helps companies become more competitive by providing the most secure, efficient, reliable, and flexible means of conducting business electronically. For more information, please visit www.easylink.com. This news release may contain statements of a forward-looking nature relating to future events or financial results of EasyLink Services Corporation. Investors are cautioned that such statements are only predictions and actual events or results may differ materially. In evaluating such statements, investors should specifically consider the various factors that could cause actual events or results to differ materially from those indicated from such forward-looking statements. These include: the need to raise additional capital; the ability to service our remaining indebtedness, including the ability to complete a required financing and make a required $3 million repayment by May 1, 2006; the ability to continue as a going concern being dependent upon the ability to generate sufficient cash flow to meet our obligations on a timely basis, to obtain additional financing or refinancing as may be required, and to achieve and maintain profitable operations; significant leverage; the ability to attract additional customers or to expand services sold to existing customers; the ability to successfully implement our business strategy; the ability to commence service for new customers on a timely basis and to ramp usage by such customers in accordance with our expectations; significant competition; the risks inherent in integrating the EasyLink business; and the risk of being delisted from NASDAQ, including the risk that the Company may be unable to regain compliance with the $1 minimum bid price requirement on the Capital Market by the expiration of the additional 180 day grace period which would expire on August 21 , 2006 or may be unable to maintain compliance with all of the other continued listing requirements of the Capital Market. These and other risks and uncertainties are described in more detail in the Company's filings with the Securities and Exchange Commission.