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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 31, 1998
T-NETIX, INC.
(Exact name of registrant as specified in charter)
COLORADO 0-25016 84-1037352
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
67 INVERNESS DRIVE EAST, SUITE 100 ENGLEWOOD, CO 80112
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 790-9111
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
In a press release dated January 5, 1999, T-NETIX, Inc. announced that
it had exercised its option to acquire 100 percent of the common stock of
Cell-Tel Monitoring, Inc., a Florida corporation. The purchase price was
approximately $4.0 million, consisting of the conversion of $2.3 million of
Cell-Tel preferred stock and an additional $1.7 million in cash. The acquisition
will be accounted for using the purchase method of accounting. Cell-Tel engages
in the sales and marketing and research and development of a prisoner/parolee
electronic monitoring device utilizing the Internet and using T-NETIX's SpeakEZ
Voice Print(sm) technology. A copy of the press release is attached as Exhibit A
hereto.
The Registrant funded the purchase price with the borrowings under the
Registrant's line of credit with its current commercial bank.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
It is not practical for the Registrant to provide at this time the
financial statements for Cell-Tel Monitoring, Inc. required by this item. Such
financial statements are expected to be filed in a Form 8-K no later than March
16, 1999.
(b) Pro forma financial information
It is not practical for the Registrant to provide at this time the
pro-forma financial information for Cell-Tel Monitoring, Inc. which may be
required by this item. Such financial statements are expected to be filed, if
necessary in a Form 8-K no later than March 16, 1999.
(c) Exhibits
Exhibit A Registrants press release, dated January 5, 1999
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
T-NETIX, Inc.
Dated: January 12, 1999 BY: /s/ Alvyn A. Schopp
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Alvyn A. Schopp, Executive Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
99.1 Press Release Dated 1/5/99
</TABLE>
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CARL THOMPSON ASSOCIATES
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INVESTOR RELATIONS SERVICES
1075 S. BOULDER ROAD * SUITE 205 * LOUISVILLE, COLORADO * 80027
email: [email protected] * http://www.ctaonline.com
TEL 303-665-4200 or 800-959-9677 * FAX 303-665-5955
* NEWS *
FOR IMMEDIATE RELEASE: January 5, 1999
CONTACT: Alvyn A. Schopp Michele Hartley, Account Executive
CEO Wayne Brown, Sr. Vice President
T-NETIX, Inc. Carl Thompson Associates
(303) 790-9111 (800) 959-9677
T-NETIX ANNOUNCES CELL-TEL ACQUISITION
ENGLEWOOD, CO -- T-NETIX, Inc. (Nasdaq NMS:TNTX), a leading provider of
specialized call processing and fraud control software technologies, announced
that on December 31, 1998, it exercised its option to acquire 100 percent of the
common stock of Cell-Tel Monitoring, Inc., Tampa, Fla. The purchase price was
approximately $4.0 million, consisting of the conversion of $2.3 million of
Cell-Tel preferred stock and an additional $1.7 million in cash. T-NETIX is
determining whether it will record a write-down of Cell-Tel's in-process
research and development in 1998. T-NETIX will account for the transaction as a
purchase.
Cell-Tel engages in the sales and marketing and research and development of a
prisoner/parolee electronic monitoring device utilizing the Internet and using
T-NETIX's SpeakEZ Voice Print(sm) technology. Cell-Tel's product, Contain(sm),
is designed to provide a remote monitoring system with an Internet-based case
management system. "We see tremendous potential of this technology as an
expansion of our core Inmate Calling Services (ICS) business to include parolees
in home detention programs. There are nearly four million parolees in the United
States, and home detention is paying an increasingly significant role in the
correctional process," said Alvyn Schopp, T-NETIX's CEO. "In addition, we
believe the Contain(sm) product is an example of a viable and marketable
application of the SpeakEZ Voice Print(sm) technology. The expertise and
contacts of our ICS business should allow us to accelerate the sales of the
Contain(sm) product."
Through its Inmate Calling Services Division, T-NETIX provides
telecommunications services such as specialized call processing to correctional
facilities throughout the United States, and voice verification and fraud
control software technologies through its SpeakEZ Division.
(more)
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T-NETIX ANNOUNCES CELL-TEL ACQUISITION / page 2
T-NETIX management anticipates that all of Cell-Tel's employees and managers
will be retained by the Company, and that Cell-Tel's activities will be
integrated into the Company to support the ongoing Contain(sm) development as
well as assisting in the SpeakEZ and ICS product lines. "In addition to the
Cell-Tel technology, we are adding a strong technical staff and
technology-oriented managers," added Schopp.
Schopp noted that Cell-Tel's technology enables parole officers to automatically
dial up parolees at home using an Internet-based server provided by T-NETIX.
When parolees answer the telephone, they receive a computerized prompt and are
asked to provide a list of pass phrases. The SpeakEZ Voice Print(sm) technology
then verifies callers' voices to stored voice prints located on the Cell-Tel
Internet server. This service can be programmed to randomly dial parolees
throughout the day. Results of the calls are recorded for parole agencies or
officers to review over the Internet on a real-time basis. The officers can also
review any messages or responses left by parolees. If there is a problem with
compliance, the parole officer can take action.
"What's so exciting about this technology is that it gives correctional agencies
an extremely low-cost alternative to parole officers having to use face-to-face
supervision techniques to ensure subjects are complying with the terms of their
parole," said Schopp. "The service would cost approximately $2-$3 per day per
parolee a significant savings over parole officer check-ins and on-person
monitoring devices. We have had the opportunity to be intimately involved in the
marketing of the Contain(sm) product. We believe it is and will continue to be
well received by correctional agencies, and certainly by parole officers, who
would be able to focus most of their time and attention on problem cases. We
also think it will be more effective at ensuring compliance than personal
check-ups, since the dial-up can be conducted several times a day. With current
case loads, parole officers don't have time to check on parolees more than a few
times a week."
To sell the service, T-NETIX should be able to leverage its existing
relationships with correctional facilities and departments throughout the
country, explained Schopp. As a leading provider of inmate calling services,
Schopp said he anticipates that T-NETIX can work with many of its customers to
extend services to the parole and home detention process. He added that because
of T-NETIX's ability to leverage customer relationships, and the efficient
delivery of the product using automated dialers and an Internet-based server, no
significant capital investment would be required to build this business.
"We recently discussed our intent to refocus our SpeakEZ business on activities
that represent cost-effective development solutions," said Schopp. "The
acquisition of Cell-Tel gives us the Contain(sm) product which is an example of
a product that has achieved this goal."
Based in Englewood, Colorado, T-NETIX provides specialized call processing
services for correctional institutions to the telecommunications industry
including AT&T, Bell Atlantic, US
(more)
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T-NETIX ANNOUNCES CELL-TEL ACQUISITION / page 3
WEST, SBC Communications, Inc., and GTE, plus voice verification and fraud
prevention services utilizing the SpeakEZ Voice Print(sm) technology. Contact
the company on-line at www.T-NETIX.com.
This news release contains forward-looking statements, as provided for by the
Private Securities Litigation Reform Act of 1995. These statements involve risks
and uncertainties including, but not limited to: the demand for the company's
ICS products and services; the renewal of existing site-specific ICS customer
contracts and the company's ability to win new contracts; the ability to reduce
expenditures in the SpeakEZ Division and to successfully license voice
verification and fraud prevention technology; competitive pricing pressures,
particularly in the company's ICS business, the future success of newly
developed technologies; and changes in regulations or regulatory practices in
the telecommunications industry that would affect the sales or pricing of the
company's inmate calling services. For a full description of the company's
historical performance, and a detailed discussion of risks and uncertainties,
please refer to the company's documents on file with the Securities and Exchange
Commission.
Note: News releases and other information on T-NETIX, Inc. can be accessed
at no charge at www.ctaonline.com/ir/tnetix.htm or
www.T-NETIX.com on the Internet.
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