SECURITIES AND EXCHANGE COMMISSION
----------------------------------
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported): January 3rd, 2006
Commission File No. 000-49628
TELEPLUS ENTERPRISES, INC.
--------------------------
(Exact name of registrant as specified in its charter)
Nevada 90-0045023
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
7575 Transcanadienne, Suite 305, St-Laurent, Quebec, Canada H4T 1V6
- --------------------------------------------------------------------------------
(Address of principal executive offices)
514-344-0778
-------------------------
(Issuer telephone number)
N/A
- --------------------------------------------------------------------------------
(Former Name and Address)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
ACQUSITION OF ASSETS OF LIBERTY WIRELESS:
On December 29, 2005, Teleplus Wireless, Corp. ("TelePlus Wireless"), a
wholly-owned subsidiary of TelePlus Enterprises, Inc. ("TelePlus") purchased
from Star Number, Inc. ("SNI"), a wholly-owned subsidiary of InPhonic, Inc.
("InPhonic"), certain assets related to its Liberty Wireless business (the
"Purchased Assets") including customer lists, the "Liberty Wireless" brand and
SNI's rights under certain agreements, the whole effective as of December 31,
2005. Neither TelePlus nor its affiliates, directors, or officers or associates
of TelePlus' Directors or officers had a relationship with InPhonic or SNI prior
to the purchase.
The aggregate purchase price (the "Purchase Price") payable by TelePlus
Wireless to SNI for the Purchased Assets shall, subject to adjustment in
accordance with the Agreement shall be a maximum of US$1,900,000, which amount
is payable as follows:
The Purchase Price shall be paid and satisfied as follows:
(a) US$1,400,000 in cash on the Closing Date; and
(b) US$500,000 in four (4) equal successive quarterly cash instalments
of US$125,000 each subject to adjustment in accordance with the
Agreement, the first such instalment payable 90 days from the
Closing Date.
As part of this transaction, and as security for the performance by
TelePlus Wireless of its obligations, TelePlus Wireless granted security to SNI
on the Purchased Assets. Furthermore, TelePlus guaranteed in favour of SNI the
payment by TelePlus Wireless of the balance of the Purchase Price.
DESCRIPTION OF THE BUSINESS AND PRINCIPAL PRODUCTS
The Purchased Assets have been used and will continue to be used to sell
pre-paid and post-paid wireless telecommunications services under the name
"Liberty Wireless".
NO DEPENDENCE ON ONE OR A FEW CUSTOMERS
The business related to the Purchased Assets (the "Business") is currently
not dependent on any one customer. However the Business is dependent on 1
supplier, Sprint Spectrum LP which currently represents approximately 75% of the
total costs of the Business.
PATENTS, TRADEMARKS & LICENSES
As part of the Purchased Assets, TelePlus Wireless acquired the trademarks
"Liberty Wireless", "Liberty Wireless for All" as well as the pending trade
application for "Viva Liberty".
2
NO NEED FOR GOVERNMENT APPROVAL
TelePlus Wireless does not need any government approval to operate the
business.
EMPLOYEES
No SNI employees were transferred to TelePlus Wireless as a result of the
acquisition.
DESCRIPTION OF PROPERTY
No lease commitments were assumed by TelePlus Wireless as a result of the
acquisition.
LEGAL PROCEEDINGS
As of the date of filing of this report, SNI was not a party to or aware
of any legal proceedings involving it which relate to the Purchased Assets.
RELATED PARTY TRANSACTIONS
No related party transactions have been or will be entered into as a
result of the acquisition.
RISKS:
Business Risk:
- --------------------------------------------------------------------------------
o Churn Risk
The customers in this marketplace have a higher propensity to move
or cancel service than the general residential market.
o Product Replacement
Products such as VOIP could increase the Churn rate of existing
customers
o Competition
Currently there are various competitors across the United States.
Their number may increase which could decrease our ability to retain
our customers thus increase our Churn rate. The barriers to entry in
this market are financial and operating system related and new
competitors may surface in the future.
o Price Erosion
As competitors enter the market and attempt to secure market share,
there will be the threat of price reductions thus decreasing our
gross margins. Competitors could also force us to provide to new
subscribers' with higher subsidies on phones thus reducing our gross
margins.
o Integration Challenges
We could fail in our integration of the Liberty Wireless customer
base to our own and thus lose customers in the process.
o Technology
We may encounter technological problems in assimilating the Liberty
Wireless customer base which could result in us losing customers.
3
ITEM 8. OTHER EVENTS.
1. Concurrently with the acquisition of certain assets of Liberty Wireless,
TelePlus Wireless and Mobile Technology Services, LLC ("MTS"), a wholly-owned
subsidiary of InPhonic, entered into a Mobile Virtual Network Enabler Services
Agreement ("MVNE") pursuant to the terms of which MTS shall provide to TelePlus
Wireless certain back-office enabling services in support of TelePlus Wireless'
mobile virtual network operations.
2. Concurrently with the acquisition of certain assets of Liberty Wireless,
TelePlus Wireless and SNI entered into a Transition Services Agreement pursuant
to the terms of which SNI shall perform various services for TelePlus Wireless
in order to provide for the orderly transition of subscribers from SNI to
TelePlus Wireless.
ITEM 9. FINANCIAL STATEMENTS AND EXHIBITS.
Financial Statements of InPhonic.
(a) Financial Statements of Businesses Acquired - To be Provided on later Date
(b) Pro Forma Financial Information - To be Provided on later Date
(c) Exhibits:
10.1 Asset Purchase Agreement between SNI and TelePlus Wireless
10.2 Bill of Sale in respect of the Purchased Assets
10.3 Promissory Note in the amount of US$500,000 issued by TelePlus
Wireless in favour of SNI
10.4 General Security Agreement by TelePlus Wireless in favour of SNI
10.5 Guarantee by Teleplus in favour of SNI
10.6 Guarantee by InPhonic in favour of TelePlus Wireless
10.7 Mobile Virtual Network Enabler Services Agreement between MTS and
TelePlus Wireless
10.8 Non-Competition and Non-Solicitation Agreement between among
InPhonic, SNI, MTS and TelePlus Wireless
10.9 Transition Services Agreement between SNI and TelePlus Wireless
10.10 Intellectual Property Assignment between SNI and TelePlus Wireless
10.11 Assignment and Assumption Agreement between SNI and TelePlus
Wireless
10.12 Assignment, Assumption and Consent among Sprint Spectrum LP,
TelePlus Wireless and SNI.
4
Signatures
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Teleplus Enterprises, Inc.
January 3, 2006 /s/ Marius Silvasan
--------------------
Marius Silvasan
Chief Executive Officer
January 3, 2006 /s/ Robert Krebs
--------------------
Robert Krebs
Chief Financial Officer
January 3, 2006 /s/ Tom Davis
--------------------
Tom Davis
Chief Operating Officer
January 3, 2006 /s/ Kelly McLaren
--------------------
Kelly McLaren
President
5