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Beacon Enterprise Solutions Provides Letter to Shareholders

         Beacon Enterprise Solutions Provides Letter to Shareholders

PR Newswire

LOUISVILLE, Ky., Sept. 21, 2012

LOUISVILLE, Ky., Sept. 21, 2012 /PRNewswire/ -- Beacon Enterprise Solutions
Group, Inc. (OTC BB: BEAC) (www.askbeacon.com), released the following letter
to shareholders:

(Logo: http://photos.prnewswire.com/prnh/20101021/DA85933LOGO)

Dear Beacon Shareholder:

I am writing today toupdate you on recent developments since we filed our
10-Q for the quarter ending June 30th, 2012 and explainthe events the led up
to the 8-K filed last week.As we stated in our most recent quarterly
report,it would be essential to obtain additional financing to meet our
obligations in the fiscal fourth quarter, and for the rest of the calendar
year.The recently announced transaction represents what we believe will
provide for the best possible outcome for our stakeholders.Before we discuss
the most recent developments, we would like to back up a few quarters and walk
you through the events that brought us to where we are today.

The Company experienced break-even operating income for the forth fiscal
quarter ending September 30th, 2011 and positive operating income on $6.0
million in sales for the first fiscal quarter ending December 31st, 2011. The
Company experienced an unforeseen and significantrevenue shortfall for the
second fiscal quarter ending March 31, 2012 of approximately 50% or $3.0
million versus the previous fiscal quarter due to its major customer
indefinitely suspending two large global projects that accounted for
approximately 50% of the Company's annual revenue.This revenue shortfall
resulted in negative operating income and an inability to service contractors
and creditors.Accordingly, the Company began to reduce operating expenses
and allocate resources to increase incremental new revenue, understanding that
our expenses at this revenue level resulted in negative operating income.
Subsequently wedetermined that in addition to refinancing our senior debt,
additional capital was required to stabilize the Company.

The Company engaged advisors and bankers beginning in February 2012 to raise
$3.0 million in new capital and secure an asset based lending facility of up
to $5 million.The Company had discussions with approximately 20 potential
financing sources and engaged in due diligence with several banks.The
decline in net sales, which began in our second fiscal quarter, negatively
impacted our ability to complete the refinancing as planned.These efforts
yielded an amount that was not sufficient to stabilize the Company. Our
senior secured notes began to mature inJune 2012. We were unable to meet our
obligations and the Company began working with the advisors for the secured
note holders.During this time, the Company had also been working closely
with its largest customer and its critical vendors.This customer established
a deadline to resolve all outstanding vendor payments.Despite our best
efforts, this deadline was missed.Concurrently, the Company did not meet its
July and August 2012 principal and interest payments on its senior secured
notes. 

On August 29th, the company received an unsolicited offer to purchase the
operating assets of the Company from MDT Labor d/b/a/ MDT Technical in
exchange for approximately $2.2 million in cash to bring contractors of our
major customers current; an earn-out payment not to exceed $3.5 million, and;
certain other assumed liabilities associated with, among other things,
liabilities related to employees transferring to MDT.Given the status of the
refinancing efforts and state of the contractor and other vendor payables, the
only viable option for the Company to meet its financial obligations and
remain in business and avoid seeking protection under the bankruptcy code at
the time was to agree to the Asset Purchase Agreement between the Company and
MDT Labor, LLC. As a result of this transaction, the Company ceased business
operations and is exploring options including mergers, acquisitions, and new
business ventures.

The Company believes this transaction is in its, and its stakeholders' best
interest. Specifically, this Agreement, together with the other transactions
contemplated to occur in connection with it:

  oProvides for the uninterrupted service of its customers by substantially
    fulfilling outstanding vendor payment obligations;
  oProvides an opportunity to pay down the notes held by the secured lenders;
  oEnables the Company to avoid filing for bankruptcy protection and survive
    as a public entity;
  oAllows the Company to pursue the acquisition of another operating business
    that could potentially result in some return for common shareholders and
    unsecured creditors;
  oAllows most of the Company's employees to retain their positions with MDT
    as their new employer

Should any further significant developments occur, we will keep you informed.

Sincerely,
Bruce Widener
CEO

This press release may contain "forward-looking statements." Expressions of
future goals and similar expressions reflecting something other than
historical fact are intended to identify forward-looking statements, but are
not the exclusive means of identifying such statements. These forward-looking
statements include, without limitation, the ability to receive future earn-out
payments under the Asset Purchase Agreement and consummate a transaction to
bring a new business into the Company. Because the earn-out payments are
dependent on the success of MDT with the acquired assets, a favorable outcome
of either of these events is uncertain. The company undertakes no obligation
to revise or update any forward-looking statements in order to reflect events
or circumstances that may arise after the date of this press release.

SOURCE Beacon Enterprise Solutions Group, Inc.

Website: http://www.askbeacon.com
Contact: Bruce Widener, CEO, +1-502-657-3507, investors@askbeacon.com; Porter,
LeVay & Rose, Inc., Michael Porter, President, +1-212-564-4700; or Halliburton
Investor Relations, Geralyn DeBusk, President, or Hala Elsherbini, COO,
+1-972-458-8000
 
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