I regret to inform you the Xperinet Board of Directors has voted to discontinue operations effective immediately, pending filing of bankruptcy proceedings. Economic factors in the US market have left the company insolvent, and made it difficult for the company to find additional sources of capital. Unless the company is able to secure a further investment of $400,000 or find a buyer in the next few days, it intends to file for bankruptcy. If you know of any interested parties, please have them contact me.

This decision was driven largely by certain economic factors resulting from the downturn in the US housing market. Reduced investment in housing resulted in a marked reduction in revenues for Xperinet, as with many CEDIA manufacturers. Secondly, the soft market caused numerous dealers to default on their credit terms, dramatically increasing our bad debt experience. These events came on the heels of a major development effort that drained the company of cash. Finally, uncertainty about the US economy and the CEDIA market dried up all our sources of capital. The convergence of these four factors proved insurmountable for the company.

I know this event will create many difficulties for you and your customers, as you seek to support the installed base of product. All product manufactured during the last two years was built by our contract manufacturer, FutureIT. FutureIT provided a 3-year guarantee on the performance of the hardware, and also has sufficient expertise in supporting the software that they may be able to assist you with minor issues. They also are in possession of all MIRV units that have been returned for repair. Following is contact information for FutureIT.