NEW YORK, May 18, 2020 /PRNewswire/ -- Pareteum
Corporation (Nasdaq: TEUM), a global cloud platform for
mobility, messaging and unified communications, today issued an
open letter to shareholders.
Dear Shareholders,
We are writing to you today to provide an update on recent
progress we have made at the Company including improvements to our
balance sheet, and on the restatement, we announced
in the fourth quarter of 2019. We greatly appreciate your
patience and understanding as we are working through this process.
Most importantly, we wish to convey that Pareteum is
operating well during these challenging times, serving our
customers, adding and activating new customers, and making the
necessary changes to emerge as a stronger company.
COVID-19 Update
The world has changed since our last update. These are
unprecedented times and our top priority is everyone's health and
safety – that of our employees, our customers, our partners, and
our shareholders. Our thoughts are with you and your loved ones
during these uncertain times. Like every company, Pareteum
has been impacted by the COVID-19 pandemic and the situation has
presented both headwinds and tailwinds for our business.
We have taken decisive near-term actions in response to
COVID-19, while balancing the long-term opportunity. As a
technology communications company, we believe that our operational
planning has prepared us to work and deliver our services to
clients remotely. With our entire global workforce working
remotely since early March, we have eliminated travel and reduced
costs where appropriate. Our team has stepped up to face this
challenge. We will return to our offices in a safe and
measured way as local guidelines allow. We want to thank our
employees for their resilience and flexibility during this
time, and for their mutual support of each other and of our
customers.
This crisis has dramatically increased the need for
a virtual workplace and Pareteum is experiencing higher
demand across its platform as customers continue to scale
their networks to manage this increasing demand. The Pareteum
platform continues to deliver mobility and connectivity services
and was engineered to support and perform in an increasingly
virtual world. As a result, we are experiencing higher levels of
activity across our network in key areas including messaging,
consumer mobile and IoT.
We do have some level of customer exposure to certain industries
that have been severely impacted, including hospitality and
travel. As more countries relax air travel restrictions, we
anticipate increased usage of our products to follow suit.
While the ongoing and future effects of the COVID-19 pandemic
are unpredictable and continue to evolve, we are taking steps that
we believe are prudent to protect the long-term health of our
business. We believe that Pareteum is able to be
well-positioned for the long-term. We are aligned with our
customers' success and continue to be proactive in engaging with
them to understand their needs and help them meet their business
requirements by providing reliable software and connectivity
services through this pandemic.
Financing and Balance Sheet
Improving our balance sheet and being properly capitalized to
achieve our growth objectives is critical to Pareteum's future
success.
As previously disclosed in December, Pareteum successfully
commenced a Series C Redeemable Preferred Stock raise, of which
close to $10 million has closed to
date. We believe that this financing responsibly strengthened our
balance sheet and provided capital to continue executing our growth
strategy while supporting and retaining both our employee and
customer base. Nevertheless, we require additional capital to
fund our projected operating requirements and allow us to fund our
growth strategy. The Company continues to be opportunistic in
looking for additional financing for investment and working capital
needs.
In May, Pareteum received $1.3
million in loan proceeds from the U.S. Paycheck Protection
Program, established from the Coronavirus Aid, Relief, and Economic
Security Act and administered by the U.S. Small Business
Administration (SBA). Additionally, internationally we renegotiated
current monthly commitments towards office rent and supplies in
several locations, reduced current expense for suppliers of all
types and tax obligations, agreed on the postponement of short and
middle term levies by making use of governmental programs, where
possible, and accessed cash in the form of small loans.
Restatement Update
Pareteum has been working to complete its financial restatement
for the full year ended December 31,
2018, and interim periods ended March
31, 2019 and June 30, 2019.
The decision to restate these financial statements is based on the
Company's conclusion that certain revenues recognized during 2018
and 2019 should not have been recorded during that period.
We are proceeding as expeditiously and thoroughly as
possible to complete the restatement and we intend to file the
restated financial statements as soon as practicable. Although
substantial progress has been made in the restatement, it is
imperative to allow the process to continue for an additional
period of time to ensure the completeness and integrity of our
financial results. As we approach completion, the Company
will provide additional updates.
The Company has also begun to institute, and will continue to
implement and evaluate, additional remedial measures and
controls.
The Company intends to timely request a hearing before the
Nasdaq Hearings Panel in connection with a delisting notice it has
received earlier this month as a result of the Company's lack of
timely filing all required periodic financial reports with the
Securities and Exchange Commission. The Company intends to appeal
the delisting notice and seek additional time.
Actions We have Taken
As a result of the ongoing restatement, Pareteum has implemented
a range of measures, including previously announced changes to
strengthen the management team and the Board of Directors as well
as increased and enhanced internal controls.
The leadership transition was a key step as we work to
complete the restatement process and improve the company's
financial and operational controls and we are continuing to
evaluate all aspects of our business, including ways to decrease
operating expenses without impacting customer-facing
activities.
Since October 2019 we have made
the following updates to our leadership team:
- A splitting of the roles of Chair and CEO, with Bart Weijermars
serving as Interim CEO and Mary Beth
Vitale appointed Non-Executive Interim Chair of the
Board.
- Bart Weijermars was appointed Interim CEO and Laura W. Thomas was appointed Interim CFO.
- The Board has established a new Business and Strategy
Committee, Chaired by Independent Director Luis Jimenez-Tunon, to re-align the Company's
strategic priorities for 2020 and beyond.
- Pareteum added additional resources to strengthen our finance
team.
Pareteum's Board is committed to the highest managerial and
governance standards and we are actively working to deliver
long-term, sustainable, shareholder value. Our goal is to return to
a normal quarterly reporting pattern as soon as possible. We
believe the processes we are implementing will significantly
improve Pareteum's oversight, control functions and corporate
governance. We also believe these measures will enhance the
company's day-to-day operations, creating a stronger company and
positioning Pareteum to deliver value for shareholders over the
long-term.
Moving Forward
We are continuing to execute on our strong product roadmap while
introducing new features on our platform and helping our customers
scale and deliver a rich combination of mobility, customer
engagement, and analytics and intelligence services. In early
April, we announced that we expanded our partnership with
Vodafone to deliver our Mobile Virtual Network platform; this is
another great example of how we believe that Pareteum enables
brands to deliver communication services under one platform on a
global basis. We are continuing to add subscribers to our platform
globally. Pareteum was recently selected by M1 Limited, a leading
Singaporean mobile operator, to power the expansion of mobility
services across the Asia-Pacific
region. Additionally, Pareteum's messaging services have seen an
uptick in volume due to the increasing requirements of text
authentication and growth in general messaging demand and we have
begun to roll out Wi-Fi services to new and existing mobile
subscribers.
Over the last several months we have achieved several positive
milestones including signing and deploying new customers to the
Pareteum Experience Cloud, raising capital, strengthening the
management team and Board of Directors and implementing additional
oversight and control measures. We expect to make more positive
changes in the short- and medium-term to continue to strengthen the
company and we are very pleased with the continued strong momentum
visible in the business as we partner with leading communications
providers globally to drive revenue and customer
engagement.
In summary, we remain focused on operating the business and
delivering outstanding results for our customers and we are
committed to upholding the highest standards throughout our
business and operations. Our unique products and technology
offerings continue to drive strong customer demand and we are well
positioned to capitalize on a large market opportunity.
Before I end this letter, I would like to thank you for your
trust and support of Pareteum and reiterate our commitment to you,
our shareholders, we will remain forthright and transparent during
these uncertain times. We plan to continue updating you on the
trends we observe and the progress of our business as appropriate.
We are working diligently to complete the restatement and believe
we will emerge well positioned to grow and capture the large
opportunity in the high-growth markets in which our company
operates.
Stay safe and healthy.
|
Mary Beth
Vitale
|
Bart
Weijermars
|
|
Interim Chair of the
Board
|
Interim Chief
Executive Officer
|
About Pareteum Corporation
Millions of people and devices are connected around the world
using Pareteum's Global Cloud Communications Platform, enhancing
their mobile experience. Pareteum unleashes the power of
applications and mobile services to bring secure, ubiquitous,
scalable, and seamlessly available voice, video, SMS/text
messaging, data, media, and content enablement to our customers. In
so doing, we are able to make worldwide communications services
easily and economically accessible to everyone. By harnessing the
value of our cloud communications platform, Pareteum serves
enterprises, communications service providers, early stage
innovators, developers, IoT, and telecommunications infrastructure
providers. Pareteum envisions a new mobile communications
experience, imagining what will be and delivering now. For more
information please visit: www.pareteum.com.
Forward Looking Statements
Certain statements contained herein constitute "forward-looking
statements" as defined by the Private Securities Litigation Reform
Act of 1995. Such statements may include, without limitation,
statements with respect to Pareteum's plans and
objectives, projections, expectations and intentions. These
forward-looking statements are based on current expectations,
estimates and projections about Pareteum's industry,
management's beliefs and certain assumptions made by management.
Readers are cautioned that any such forward-looking statements are
not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict.
We discuss many of these risks, uncertainties and assumptions
in Item 1A under the heading "Risk Factors" in our Annual Report on
Form 10-K for the year ended December 31,
2018, as updated by our other filings with the SEC. Because
such statements involve risks and uncertainties, the actual results
and performance of Pareteum may differ materially from
the results expressed or implied by such forward-looking
statements. Given these risks and uncertainties, readers are
cautioned not to place undue reliance on such forward-looking
statements. Unless otherwise required by
law, Pareteum also disclaims any obligation to update its
view of any such risks or uncertainties or to announce publicly the
result of any revisions to the forward-looking statements made
here. Additional information concerning certain risks and
uncertainties that could cause actual results to differ materially
from those projected or suggested in the Company's filings with the
Securities and Exchange Commission, copies of which are available
from the SEC or may be obtained upon request from the Company.
Media Inquiries
Press@pareteum.com
Pareteum Investor Relations Contacts:
Investor
Relations +1 (646) 975-0400
Investor.relations@pareteum.com
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SOURCE Pareteum Corporation