SOURCE: Nettel Holdings

August 20, 2007 09:38 ET

Nettel Holdings Announces 2nd Quarter 2007 Financial Results and Forward Guidance

Second Quarter Revenues Increase Over 13% to $5.76 Million vs. Prior Quarter

VANCOUVER, WA--(Marketwire - August 20, 2007) - Nettel Holdings, Inc. (OTCBB: NTTL) today announces 2nd Quarter 2007 Financial Results and Forward Guidance.


The Company's net revenue for the three-month period ended June 30, 2007 was $5.76 million compared to $128,988 for the same period ended June 30, 2006. Gross profit for 2nd quarter 2007 was $322,954 compared to $68,243 for the same period ended June 30, 2006. Net loss for the quarter was $1,820,858, which primarily was a non-cash charge for the market value of the Company's common stock issued to engineers and consultants for their services. Excluding this non-cash charge, the company was profitable for the quarter. The market value for the shares issued was calculated based on the date it was issued and not on the date of the agreement. When the stock price increased over 300%, the value of the expenses also increased by the same amount. The large investment Nettel has made to implement their new ideas has laid a strong foundation for the development of the Company's major divisions, AVOP, Tougi, Talking Technologies, and SipZoo, which are now producing revenue.

Significant strategic milestones achieved:


Over the past three months, Tougi has been going through a great deal of changes and expansion. It has reached a significant growth milestone of over 6,000 manufacturers. Our base of large contract buyers is growing rapidly. The large contract division staff, now well trained, has been actively working with buyers and suppliers on a daily basis matching and processing orders. Shipments, for a majority of these orders, will be recurring on a monthly or quarterly basis. Our back office has also been busy working with buyers and sellers on completing Letters of Credit.

Talking Technologies

The engineering and testing phase of the Universal Global Translator has been successfully completed. Beta testers have been amazed at how human-like the voices really are. They were very happy with the voice quality and the high accuracy rate. Management has been in negotiations with several large companies and organizations that will be marketing the Universal Global Translator to their clients and networks. We currently have an initial demand from different companies for over 100,000 copies. In order to satisfy current and future orders smoothly, the company has identified a software distribution company to handle the next phase. This company will be responsible for designing the retail packaging, process retail and online wholesale orders, shipping and distribution, and handle customer service and sales. Our software engineers are currently making the final changes and improvements to the software based on feedback and suggestions that were received during the test.


Through close relationships with our largest suppliers, our engineers discovered a tremendous opportunity toward the end of the 1st quarter to increase daily minutes capacity and our profit margin. We also knew that to capitalize on these opportunities we would have to make bold changes. Making this significant strategic investment and upgrade will allow us to expand, increase our profit margins, and provide our customers with the best rates and best quality now and in the future.

The development of these opportunities continued in the second quarter of 2007, with emphasis on installing our own gateways in key countries to provide stability in revenue and significantly increase our profit margin. Having our own gateways will provide us an unmatched competitive advantage over our competitors. In addition, the complete installation of these Gateways will increase our profit margin to over 20% and facilitate our company's growth significantly.

"Our International and domestic buyers' appetite for wholesale minutes is growing fast, and we are responding to that need quickly," said Michael Nguyen, Nettel Holdings CEO. "We will continue deploying additional gateways as fast as we can to meet the demand from our buyers."

As of today we have installed eight gateways in two countries. More gateways have been ordered and are scheduled to arrive in 2-3 week increments. Each gateway has a capacity of 30 ports. One port will generate about $150 to $370 in sales per day. The current pre order capacity from our buyers will saturate 3,000 ports (100 gateways) per day. Our initial plan is to have 2,000 ports in operation by the end of the year.

Looking Forward

We continue to see 2007 as a year of strong financial performance based on the current contracts and orders in the pipeline. Our company is well positioned for long-term growth and profitability, and we remain confident about the future prospects. We believe that the value of our technology will translate into both domestic and international sales growth for the next several years. We have created uniquely helpful products and services that have tremendous value in today's marketplace.

We have already made important gains through the first two quarters, improving our business fundamentals, bringing us closer to our intermediate objectives. During this period of development, we continued to grow. We encourage each of our shareholders to stay with us as our growth accelerates. Your confidence and trust will be rewarded. Over the long-term, I believe that Nettel's stock price will reflect the benefits of the foundation we are putting in place today.

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