News Feed Item

Telehop Communications Gains Wireless Spectrum, International Presence with Acquisition of G3 Telecom

Telehop Communications Inc. (“Telehop” or the “Company”) (TSX-V:HOP) today announced its entry into the wireless telecommunications industry with the completion of the previously-announced agreement (the “Agreement”) to acquire shares and assets of G3 Telecom Corp. and its group of affiliated companies (“G3 Telecom”).

In accordance with the terms of the Agreement (see news release dated February 21st, 2014), Telehop acquired G3 Telecom's wireless telecommunications licences for Huntsville, Ont., and Dawson Creek, B.C., as well as its telecommunications businesses in the U.S. and the Philippines. G3 Telecom is a facilities-based reseller of telecommunication services in Canada, and is registered with the Canadian Radio-television Telecommunications Commission (CRTC) and the Federal Communications Commission (FCC) in the United States.

“The closing of this transaction is a significant step forward in Telehop’s efforts to expand its industry presence and broaden its product offering to customers,” said Telehop CEO Rajiv Jagota. “Telehop has transformed itself into an international telecommunications and wireless business with the acquisition of G3 Telecom. In addition to our existing products, we now have a platform in the dynamic wireless sector that can be leveraged to take advantage of growth opportunities at home and abroad.”

“The synergies between our two companies make this transaction extremely attractive for customers and shareholders,” added Rajan Arora, CEO of G3 Telecom. “More products mean greater customer appeal, and a rationalized cost structure and enhanced access to capital open up new opportunities to create greater value for all of our shareholders.”

The aggregate purchase price of the acquisition was $4.3 million, payable $2.0 million in cash on the date of closing, $1.5 million over 24 months from the date of closing by way of a secured promissory note with interest at five (5) per cent per annum and the issuance of eight million common shares of the Company at a deemed value of 10 cents per common share. The Agreement provides for a price reduction of $1.0-million should Industry Canada not approve the transfer consents of two wireless spectrum licences to Telehop's control within 90 days from the date of closing. This reduction will be offset against the $1.5 million outstanding secured promissory note over 24 months after closing. The Agreement also provides for the cancellation of five million common shares issued to the vendors in the event that the FCC fails to approve the transfer consents of G3 Telecom's U.S. subsidiary to Telehop's control within 90 days from closing. The Company does not anticipate any issues with respect to obtaining the regulatory consents and transfers.

In connection with the transaction, Telehop completed a concurrent private placement of $3.0 million of unsecured, five-year debentures. This offering facilitated the acquisition costs, along with the closing and integration costs of G3 Telecom's business with Telehop. The debentures will mature five years from the date of closing of the offering and will bear interest at a rate of 10 per cent per annum, payable semi-annually in cash on June 30 and December 31 in each year, commencing on June 30, 2014, with the final payment due on the maturity date. Each debenture was priced at a two (2) per-cent discount, namely at $980 per $1,000 of the principal amount thereof. The debentures may be redeemed at the option of the Company provided that the debentures are not redeemable before June 30, 2016. On and after June 30, 2016, and at any time prior to the maturity date, the debentures are redeemable at the option of the Company at a price equal to $1,000 per debenture plus accrued and unpaid interest thereon up to but excluding the date of redemption. The Company engaged Jones, Gable & Company Ltd. (“Jones Gable”) to act as finder in connection with the offering and paid Jones Gable a $195,000 fee equal to 6.5 per cent of the gross proceeds raised from the sale of the debentures. The debentures issued pursuant to the offering will be subject to a statutory four-month-and-one-day hold period.

With the completion of the transaction, Mr. Arora and Mr. Jagota were appointed to the Telehop board of directors, along with Robert Stikeman a Toronto lawyer who is also counsel to Telehop. These directors replace Michael Boyd, Mitchell Blum and Theo Luykenaar who resigned to accommodate these appointments. The board wishes to thank the outgoing directors for their valuable contributions.

The acquisition of G3 Telecom constitutes a fundamental acquisition as such term is defined in the policies of the TSX-Venture Exchange. A business acquisition report in respect of the purchase of G3 Telecom will be prepared in compliance with National Instrument 51-102 Continuous Disclosure obligations and filed after completion of the acquisition.

A summary of the financial effect of the G3 Telecom business acquisition is as follows:

G3 Telecom is a privately owned telephone services reseller operating in Canada which operates a prepaid long distance service with a Philippine call center. It receives deposits from customers and applies them to services as and when later used. G3 Telecom currently has approximately $790,000 on deposit which passed to Telehop on closing. In the last completed calendar year the combined financial results of the G3 Telecom business (normalized and excluding related party transactions) were as follows and are compared to 9 months as reported by Telehop to September 30 2013 (note that the information below is unaudited):


G3 Group


Telehop 9
months to
Sept 30

Consolidated Sales $ 10,714,789 $ 6,313,837
Cost of Sales   ($7,148,082)   ($3,620,095)
Gross Profit $ 3,566,707 $ 2,693,742
Other Income $ 36,562 -
Total Income $ 3,603,269 $ 2,693,742
Third Party Expenses $ 3,096,296 $ 2,559,968
EBITDA $ 506,973 $ 133,774

(1) Note: These amounts were prepared on private company accounting standard for private enterprises (ASPE).

By combining the businesses, management believes that significant operating expenses can be reduced to improve the EBITDA of the combined businesses in the upcoming year and beyond. As well, the wireless spectrum assets can be activated and used to open new roaming opportunities for Telehop customers in the United States and overseas markets. The addition of working capital will allow Telehop to consider additional acquisitions and expansion of the new cellular opportunities. No commitments have been made with respect to any such acquisition transactions.

The Company also announces that effective February 26, 2014 the Board of Directors approved the grant of incentive stock options in the amount of 200,000 incentive options issued to the CEO Rajiv Jagota, 100,000 incentive options to the CFO Robert Cosman and 100,000 incentive options to the Chairman Lawrence Cyna. Each stock option has certain vesting terms as outlined in the stock option plan, and each option allows the holder to acquire common shares for a period up to five years. Each stock option represents the right to purchase one (1) common share of the Company, to be exercisable at $0.12 per share which is the closing price on February 26, 2014. The total number of options that are being granted is 400,000.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Certain statements contained in this news release constitute forward-looking statements. These statements relate to future events. All statements other than statements of historical fact are forward-looking statements. The use of the words “may”, “expected”, “believes” and other words of a similar nature are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although Telehop believes these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. Such statements include, but are not limited to, statements with respect to the future of Telehop’s business on a post-transaction basis and the transfer of the wireless spectrum licenses and regulatory consents. Actual results could differ materially from those anticipated in these forward-looking statements as a result of prevailing economic conditions, receipt of requisite regulatory approvals, and other factors, many of which are beyond the control of Telehop. The forward-looking statements contained in this news release represent Telehop’s expectations as of the date hereof, and are subject to change after such date. Telehop disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable securities regulations.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities - ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups.
Digital transformation is about embracing digital technologies into a company's culture to better connect with its customers, automate processes, create better tools, enter new markets, etc. Such a transformation requires continuous orchestration across teams and an environment based on open collaboration and daily experiments. In his session at 21st Cloud Expo, Alex Casalboni, Technical (Cloud) Evangelist at Cloud Academy, explored and discussed the most urgent unsolved challenges to achieve fu...
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.
Daniel Jones is CTO of EngineerBetter, helping enterprises deliver value faster. Previously he was an IT consultant, indie video games developer, head of web development in the finance sector, and an award-winning martial artist. Continuous Delivery makes it possible to exploit findings of cognitive psychology and neuroscience to increase the productivity and happiness of our teams.
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory? In her Day 2 Keynote at @DevOpsSummit at 21st Cloud Expo, Aruna Ravichandran, VP, DevOps Solutions Marketing, CA Technologies, was jo...
The standardization of container runtimes and images has sparked the creation of an almost overwhelming number of new open source projects that build on and otherwise work with these specifications. Of course, there's Kubernetes, which orchestrates and manages collections of containers. It was one of the first and best-known examples of projects that make containers truly useful for production use. However, more recently, the container ecosystem has truly exploded. A service mesh like Istio addr...
Predicting the future has never been more challenging - not because of the lack of data but because of the flood of ungoverned and risk laden information. Microsoft states that 2.5 exabytes of data are created every day. Expectations and reliance on data are being pushed to the limits, as demands around hybrid options continue to grow.
As IoT continues to increase momentum, so does the associated risk. Secure Device Lifecycle Management (DLM) is ranked as one of the most important technology areas of IoT. Driving this trend is the realization that secure support for IoT devices provides companies the ability to deliver high-quality, reliable, secure offerings faster, create new revenue streams, and reduce support costs, all while building a competitive advantage in their markets. In this session, we will use customer use cases...
Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage.
Digital Transformation: Preparing Cloud & IoT Security for the Age of Artificial Intelligence. As automation and artificial intelligence (AI) power solution development and delivery, many businesses need to build backend cloud capabilities. Well-poised organizations, marketing smart devices with AI and BlockChain capabilities prepare to refine compliance and regulatory capabilities in 2018. Volumes of health, financial, technical and privacy data, along with tightening compliance requirements by...
Evan Kirstel is an internationally recognized thought leader and social media influencer in IoT (#1 in 2017), Cloud, Data Security (2016), Health Tech (#9 in 2017), Digital Health (#6 in 2016), B2B Marketing (#5 in 2015), AI, Smart Home, Digital (2017), IIoT (#1 in 2017) and Telecom/Wireless/5G. His connections are a "Who's Who" in these technologies, He is in the top 10 most mentioned/re-tweeted by CMOs and CIOs (2016) and have been recently named 5th most influential B2B marketeer in the US. H...
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of bus...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, we provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading...
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER give you detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPO also offers s...