Market Overview

Inventergy Gets Heavyweight Partner in Fortress Investment Group

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CAMPBELL, CA, Sept. 29, 2016 /PRNewswire/ - About one month ago, IP licensing and innovation company Inventergy Global, Inc. (NASDAQ: INVT) struck a deal to amend a debt agreement with Fortress Investment Group, allowing Inventergy to retain most of the cash from a recent license installment payment and hold off on making a debt amortization payment to Fortress.  Looking back, it was an omen of bigger and better things to come.

On Thursday morning Silicon Valley-based Inventergy disclosed deepening its relationship with the investment manager giant, signing a letter of intent under which Fortress will provide financial and other resources to monetize the roughly 760 telecommunication patent assets Inventergy previously acquired from Panasonic, Nokia and Huawei.  In short, Fortress has switched from being simply a finance partner of Inventergy to a comprehensive business partner.

Per the LOI, Fortress, a NYSE-listed company with approximately $70.2 billion of assets under management as of the end of June, has agreed to fund an enhanced IP enforcement program and make moves that position Inventergy in a much stronger financial position going forward.  Fortress agreed to eliminate approximately $21 million in liabilities on Inventergy's balance sheet that stem from an existing agreement between the two firms and deliver $2.2 million for Inventergy to pay-off other debt related to monetizing the patents. 

The partnership is a game changer for this company and shareholders on multiple levels.  Getting Fortress in Inventergy's corner gives the company the power to aggressively defend its intellectual property, effectively leveling the playing field with larger telecommunications and mobility companies that are widely known for stepping on smaller players that lack the financial muscles to fight to protect patents.

For its efforts, Fortress will take the higher portion of a 70/30 split with Inventergy on all future net revenue resulting from monetizing the patents, as will be defined in a new revenue sharing agreement.  The split goes into effect following payments being made to the previous patent holders, payment of any other monetization costs and Fortress collecting approximately $30 million

In line with the aforementioned agreement in August, Fortress has agreed that Inventergy doesn't have to make a scheduled amortization payment at the end of this month and waived a liquidity requirement for another month ahead of a definitive revenue sharing agreement between the companies.

While the headline benefits of the partnership are obvious, the subliminal message further supports the value of Inventergy IP.  It's assumable that Fortress thoroughly vetted the intellectual property and decided that it ought to be of high enough quality to warrant an investment. 

Independently, Inventergy has generated about $8 million in completed transactions related to the telecom patents.  In 2016, the company is ramping up its efforts, including launching a new technology licensing business initiative, called the Inventergy Innovations program, during the second quarter.  With this program, Inventergy has hired Ken Cannizzaro, reuniting him with Joe Beyers to build-out a technology licensing business model similar to the one the two successfully created at Hewlett-Packard that generated hundreds of millions of dollars annually. 

The program is already bearing fruit, with four partnerships already penned in the past five months and more being negotiated that are expected to result in definitive deals. On Tuesday, Inventergy announced that 10 weeks after striking a partnership with Pabalon the two have established an engagement with a Fortune 100 company to demonstrate Pabalon's wireless charging technology, thus proving the value of Inventergy Innovations business strategy

Interested parties are encouraged to read the complete Inventergy press release and learn more about the company at www.inventergy.com.

SOURCE Inventergy Global, Inc.

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