SOURCE: Arkados, Inc.

Arkados, Inc.

July 05, 2011 13:12 ET

Arkados Completes Sale of Semiconductor Business

Significant Step in Restructuring Its Balance Sheet and Focusing on HomePlug-Based Systems and Consulting, Smart Grid Applications, Energy Savings ("ESCO") Products and Services, and on Communications Products and Services Utilizing HomePlug, Wireless, and 4G Technologies

FAIRFIELD, NJ--(Marketwire - Jul 5, 2011) - Arkados Group, Inc. (OTCQB: AKDS) (PINKSHEETS: AKDS), one of the pioneers of powerline communication technology co-founding member of HomePlug Powerline Alliance, today announced that it completed the sale of semiconductor business to STMicroelectronics. The purchase price received by Arkados was $11 million of which $7 million was received in December 2010 as a license fee and $4 million at closing on June 24, 2011. Substantially all of the proceeds of the sale and license were utilized by Arkados to settle outstanding debt. Arkados settled all outstanding secured debt of approximately $19.5 million for payments made in December 2010 and closing of approximately $9 million. Arkados paid approximately $1.4 million to employees for past due compensation leaving the balance due to be settled for equity in the company. In addition, Arkados agreed to settle approximately $1.1 million of notes that were in default for a combination of cash, stock and warrants to buy common stock. Arkados plans to continue discussions with the holders of the remaining unsecured debt, in an effort facilitate financing of its remaining systems business and new businesses, including Systems and Consulting for Home Networking and Smart Grid Applications, Energy Savings ("ESCO") Products and Services, and Communications Products and Services utilizing powerline and wireless and 4G capabilities. No assurance can be given that such efforts will be successful or that financing will be available to Arkados. Such settlement of debt in exchange for equity remains subject to negotiation and compliance with securities laws and regulations, as well as the approval of amendments to certificate of incorporation to authorize the issuance of a sufficient number of shares of common stock to complete these settlements.

About Arkados

Arkados, "the HomePlug Applications Company," became known for delivering a universal platform that enables networking of home entertainment and computer devices using standard electricity lines. The company's semi-conductor business prior to being sold in June 2011 had developed system-on-a chip solutions uniquely designed to drive a wide variety of powerline-enabled consumer electronics and home computing products. In addition to its semiconductor business and expertise, Arkados also developed a certain amount of expertise in building systems, both through internal and outsourced resources, utilizing such chips for its various customers. Based on this history, Arkados current plans are to develop Systems and Consulting for Home Networking and Smart Grid Applications business, develop our Energy Savings ("ESCO") Products and Services business, and develop a business based on products and services utilizing powerline and integrated wireless and 4G capabilities technology. HomePlug® is a registered trademark of the HomePlug Powerline Alliance. Other names and brands may be claimed as the property of others.

This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements as to the future performance of the company and the risks and uncertainties detailed from time to time in reports filed by the company with the Securities and Exchange Commission. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, the company's ability to raise necessary financing, ability to attract and retain key personnel, timely product development and acceptance, and the impact of competitive services and pricing and general economic risks and uncertainties.

Contact Information

  • Contact:
    Andreas Typaldos
    Arkados Group, Inc.
    87 Fairfield Ave, Fairfield NJ 07004
    Tel. 917-622-5800