Exhibit 99.1
PRESS RELEASE
NxGen Networks Announces First Phase of Turnaround Plan;
June 14, 2001 Denver, Co. / Internetwire / NxGen Networks, Inc., (OTC.BB:
NXNWE), a global telecommunications provider, today announced it has completed
the first phase of its turnaround plan by completing the acquisition of
Southernplanet, Inc. The company also announced a substantial decrease in
headcount to a small number of consultants, as well as conditional funding
commitments of $1 milllion in bridge loans. Finally, NxGen's Board has confirmed
its intention to complete the FY 2000 audit, 10K and first quarter 2001 10Q with
the company's current auditors, Ernst and Young.
The completion of the Southernplanet acquisition, which was announced via
signature of Letter of Intent on May 01, 2001, comes days ahead of the scheduled
closing target of June 15, 2001. NxGen exchanged 30,647,737 newly-issued shares
in exchange for 100% of the outstanding equity of Southernplanet.
Southernplanet's previous owner, Seedling Technologies Corporation (OTC.BB:
SEED), now owns approximately 53% of the outstanding and issued capital stock of
NxGen Networks. Additionally, as was previously announced, NxGen's Board of
Directors is now composed of Douglas B. Spink (Seedling Chairman) as Chairman,
Paul R. Peterson, and David Swainson. Additional Board nominees are expected as
the turnaround progresses.
The Seedling-lead bridge round of $1 million is expected to follow a rolling
close. Simultaneously with this bridge round, NxGen is taking aggressive actions
to trim its total outstanding accounts payable in order to conserve cash and
operate most effectively.
Additionally, NxGen announced that it has terminated all of its current
employees in order to cut its core operational expenses. The company will hire a
small number of key technical and executive consultants to assist during the
turnaround and integration of Southernplanet's operations. Southernplanet's
headcount is unchanged as a result of the reorganization. Patrick Edenholm,
Southernplanet's CEO, joins the NxGen management team.
Seedling's CEO, Douglas B. Spink commented "We are ramping down NxGen's
operational burn rate while we work through the essential steps of the company's
turnaround, recapitalization, and strategic realignment. The difficult decision
to terminate employees has not been taken lightly, and is in the best interest
of the company right now. NxGen's people are a passionate, corageous, and a
effective team. I sincerely hope to be able to re-hire many of them as we ramp
the company back up. However, it would be irresponsible to the company and our
employees to keep them on while our workout is still in the early stages."
"Dependent on the speed with which we can complete the bridge round, we aim to
complete the 2000 10K and 2001 10Q with Ernst and Young by July, and apply for
relisting with the Over the Counter market immediately thereafter. The audit and
SEC filings have been delayed due to NxGen's cash constraints; completing the
bridge round will remove that bottleneck and allow relisting, which is an
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important tactical milestone for this turnaround effort. It is not the only
goal, but it is an important one to us all."
NxGen CEO Mark Sampson continued: "Cutting NxGen's burn rate is a painful but
necessary step, one that none of us relish. This decision does not change our
dedication to treat all former employees with complete fairness financially,
including payment of all outstanding obligations to them as soon as the bridge
round is complete. As we ramp the company back up this fall, I hope to be able
to work with many of the members of our team once again. Seedling has helped us
to flesh out a viable operating plan that sees us through these difficult,
transitional months. While I know it is a sound plan, it is not easy to say
goodbye to my colleagues as a result."
NxGen's newly-revamped operating plan will be released in a conference call with
investors to be scheduled on July 2nd, 2001. Details on the call will be
released on June 25th, and the call will be open to all investors and other
interested parties.
Concludes Spink: "We have more hard decisions to make in the days and weeks
ahead. It would be easier to push these decisions off on someone else, but it
would not be right. Seedling has experience working through difficult situations
such as this, and I have confidence that our team - coupled with the excellent
executive teams of Southernplanet and NxGen - are up to the job. There is still
great risk in this project, but these first milestones are now behind us and, I
feel, the risk lessens with every step we take forward."
About NxGen Networks
NxGen Networks, Inc. (OTC.BB: NXNWE), is a global telecommunications company
that integrates the latest in voice and data switching technologies onto a
single high speed IP/ATM network. The network provides advanced voice and data
services impossible to recreate with traditional circuit switching technology.
Operational focus is on the rollout of the value-added service to clients and
wholesale marketers in Latin America. For additional information about NxGen
Networks, visit the company's Web site at www.nxgen-net.com.
About Seedling
Seedling Technologies Corp. (OTC.BB: SEED) was founded in 1998 and specializes
in identifying and supporting innovative, technology enabled companies.
Seedling's management then takes a proactive role in supporting profitable
growth, working together with the management of its portfolio companies to
provide access to key services and relationships. Additionally, Seedling acts as
a catalyst to revive the operations of troubled public technology companies.
Revenue is derived from transactional fees, ongoing consultative work, and sale
proceeds from previous direct investments. Seedling's principals have hands-on
experience helping more than 20 successful technology companies from founding
through sale or other exit opportunities. For additional information about
Seedling, visit the company's Web site at www.seedling.net.
This press release includes forward-looking statements. Investors are cautioned
that all forward-looking statements contain risks and uncertainties. Certain
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factors, many of which are beyond the control of each Company, could cause
actual results to differ materially from those contemplated by forward-looking
statements. There can be no assurance that actual results, events or
developments will occur or be realized as contemplated by such forward looking
statements.
Except for historical information contained herein, the matters discussed in
this news release are forward-looking statements that involve risk and
uncertainties, including but not limited to economic, competitive, governmental,
political and technological factors affecting the company's revenues,
operations, markets, products and prices and other factors discussed in the
company's various filings with the Securities and Exchange Commission.
CONTACT:
Douglas B. Spink
Chairman
NxGen Networks, Inc.
800-893-8894
http://www.seedling.net
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