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 it has completed it's previously announced $5.4 million common stock financing. The highlights of this financing are: -- Of the total $5.4 million, approximately $4.9 million was raised from existing investors and approximately $0.5 million from EasyLink Board members and key members of EasyLink senior management -- Purchases by existing investors were at $0.60 per share, while purchases by the EasyLink Board members and senior management were at $0.62, which is equal to the most recent closing bid price prior to the closing. No investment banking fees were paid in the transaction. The funds from this transaction will be used to pay down the Company's current Wells Fargo/Foothill loan by $3 million and the remaining $2.4 million will be used to fund working capital requirements. The Company had previously announced its agreement with Wells Fargo Foothill to obtain more favorable covenants in exchange for a $4 million loan pay down, $1 million of which was made in February 2006. Federal Partners, LP purchased approximately 4.1 million shares in the financing, raising its ownership to approximately 17.5% of the Company's total shares outstanding. Upon the closing of the financing, the Board of Directors appointed Stephen Duff, a designee of Federal Partners, as a member of the Company's board of directors. Thomas Murawski, Chairman and Chief Executive Officer of EasyLink said: "We are pleased to have completed this equity financing. The financing allows the Company to satisfy its obligations to Wells Fargo Foothill and to continue to fund its 2006 growth initiatives." 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 ability to service our remaining indebtedness; 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.