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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT NOVEMBER 15, 1999
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COMMISSION FILE NUMBER 0-230 17
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CHOICETEL COMMUNICATIONS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MINNESOTA 41-1649949
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(STATE OF JURISDICTION OR IRS EMPLOYER ID NO.
INCORPORATION OF ORGANIZATION)
9724 10TH AVE. NORTH, PLYMOUTH, MN 55441
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 612-544-1260
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ITEM 5. OTHER EVENT
Choicetel Communication, Inc. announces the sale of its Midwest assets and
its financial results for the third quarter and for the nine months ended
September 30, 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Filed herewith is the following exhibit:
99 Press release dated November 15, 1999
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Signatures
Pursuant to the requirements 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.
CHOICETEL COMMUNICATIONS, INC.
Date: November 15, 1999 By: /s/ Jack S. Kohler
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Jack S. Kohler
Vice President and Chief Financial Officer
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FOR IMMEDIATE RELEASE
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Contact: Jeff Paletz, President
Choicetel Communications, Inc.
612-544-1260
CHOICETEL COMMUNICATIONS AGREES TO SELL MIDWEST PAYPHONES AND ANNOUNCES 3RD
QUARTER RESULTS
Minneapolis- Choicetel Communications, Inc. (NASDAQ): PHON Announced that it has
entered into an agreement to sell approximately 2,000 of its payphones located
in Minnesota, Wisconsin, Iowa, North Dakota and New York to Access Anywhere LLC
based in Minneapolis. Terms were not disclosed. The transaction is expected to
close in December, following shareholder approval and the satisfaction of other
conditions.
Choicetel Communications also operates payphone routes in Philadelphia, Oregon,
and Puerto Rico, and these phones are not included in the announced transaction.
Jeff Paletz President of Choicetel Communications stated "This sale is another
significant step toward the planned divestiture of payphone assets in order to
enable the company to redeploy its financial and human resources."
Choicetel Communications' third quarter earnings were $26,000 or 1 cent per
share. Income before taxes increased approximately $8,000 or 20% compared to the
three months ended September 30, 1998. The 1999 quarter included a charge of
approximately $110,000 paid to consultants to develop an internet access
terminal business plan. CEO Jeff Paletz stated "though average revenue on a per
phone basis is down from last year, savings in line charges, long distance
expense, and marketing expenses, helped to make up for much of the decline in
revenue."
Total revenue for the nine months ending September 30, 1999 was $8,090,000 an
increase of approximately $1,313,000 or 19.3% compared to the nine months ending
September 30, 1998. The net loss for the first nine months of 1999 is $33,000 or
1 cent per share. This compares to net income of $99,000 or 3 cents per share
for the first nine months of 1998.
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CHOICETEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999
<TABLE>
<CAPTION>
Three months ended Three months ended % Change
September 30, 1999 September 30, 1998
<S> <C> <C> <C>
Revenue 2,936 2,863 2.5%
Cost of service 1,266 1,280 (1.1)
Gross Margin 1,670 1,583 5.5
Selling, general and admin 1,089 939 16.0
Depreciation and Amortization 345 420 (21.7)
Interest 133 126 5.6
Sales tax contingency 55 58 (5.5)
Income (loss) before taxes 48 40 20.0
Provision (credit) for income tax 22 16 37.5
Net income (loss) 26 24 8.3
Per share net income 0.01 0.01
Shares outstanding - weighted avg 2,915 2,915
Per share diluted net income 0.01 0.01
Shares outstanding - diluted 2,915 2,915
Nine months ended Nine months ended %
September 30, 1999 September 30, 1998 Change
<CAPTION>
<S> <C> <C> <C>
Revenue 8,090 6,777 19.3%
Cost of service 3,704 2,886 28.3
Gross Margin 4,386 3,891 12.7
Selling, general and admin 2,865 2,334 22.8
Depreciation and Amortization 1,053 1,001 5.2
Interest 368 199 84.9
Sales tax contingency 159 191 (20.1)
Income (loss) before taxes (59) 165 n.m.
Provision (credit) for income tax (26) 66 n.m.
Net income (loss) (33) 99 n.m.
Per share net income (0.01) 0.03 n.m.
Shares outstanding - weighted avg 2,915 2,915
Per share diluted net income (0.01) 0.03 n.m.
Shares outstanding - diluted 2,915 2,915
</TABLE>
FIGURES IN THOUSANDS EXCEPT PER SHARE NUMBERS.
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