Dr. Daddis: Sure, WorldGate started in 1995 and went public shortly thereafter, in 1999, with strategic moves into video telephony coupled with major product and market transformations. The history here is that after working for some time in the area of video phones, WorldGate developed a suite of technologies to build residential-class video telephony units for consumers' households. The business model pre-2009 was not sustainable nor progressive for WorldGate and eventually led to a significant recapitalization in April of 2009, led by investment partners at WGI and ACN, which is a direct-selling communications company located in North Carolina and a key WorldGate customer. In parallel, ACN was already selling approximately 15,000 to 20,000 phones per month - exclusively video phones into the residential community - so they were very successful selling video phones. ACN, however, was not happy with their current technology platform and video phone offering, and needed to source a new vendor for video telephone technology, which drove the investment in WorldGate. WGI brought, through the recapitalization, not only investment funds but in large part a new management team and new business models, as well as through ACN an anchor customer. Today we are providing video phones and a complete turn-key video digital telephone solution to the marketplace. And so you might describe WorldGate as a video phone service provider, providing through agent and wholesale channels, video phone service to residential markets as well as providing an OEM phone-only product to other entities in telecommunications to enter the video telephony market.
TWST: The company recently announced that ACN was purchasing another round of phones - in fact, 26,000 of WorldGate's video phones. What does that mean for the company? Tell us about that deal.
Dr. Daddis: This second purchase order for 26,000 units marks a significant milestone in ACN's minimum purchase agreement of 300,000 video phones on an OEM basis. To date ACN has ordered 41,000 units over the last few months, a very, very significant deal for WorldGate. It marks the beginning of shipping our next generation of Ojo¨ Quality video telephony products into the field. We will be shipping our own Ojo Vision-branded phones in the near future. This is the beginning of WorldGate's new entry point to the world of video telecommunications and offering a turn-key service offering to the market.
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