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TMCNet:  INVESTOR ALERT: Investigation of Axesstel, Inc. Announced by Law Offices of Howard G. Smith

[March 31, 2014]

INVESTOR ALERT: Investigation of Axesstel, Inc. Announced by Law Offices of Howard G. Smith

BENSALEM, Pa. --(Business Wire)--

Law Offices of Howard G. Smith announces that it is investigating potential claims on behalf of investors of Axesstel, Inc (News - Alert). ("Axesstel" or the "Company") (OTC:AXST) concerning possible violations of federal securities laws. The investigation focuses on certain statements issued by Axesstel between February 25, 2013 and March 31, 2014, concerning the Company's operations and financial performance.

Axesstel provides wireless voice, broadband access and connected home solutions for the telecommunications market worldwide. The investigation is related to the Company's June 13, 2013, announcement that the Company was anticipating a weak 2013 second quarter "due to slower demand in Europe, product launches in Africa that were delayed to the second quarter as a result of minor warranty issues, and a slower than expected rollout of the Company's new products in 2013."

The Company announced that it expected revenues for second quarter 2013 "substantially below first quarter revenue of $10.1 million, and may be as low as $2 million." The Company further announced the resigation of its chief marketing officer, and that the Company's chief executive officer "has been increasingly active in key customer relationships and has assumed [the CMO's] management responsibilities." Following this news, the Company's shares dropped 30%, to a closing price of $0.71 per share on June 13, 2013.


On October 18, 2013, in a Form 8-K filed with the SEC (News - Alert), the Company announced revenues for third quarter 2013 "well short of our initial expectations," and that the Company "used cash collected from accounts receivable to fund operations during the third quarter." The Company's press release also disclosed that its remaining $11.1 million of accounts receivable "includes approximately $9.0 million of sales to customers in Africa." According to the Company: "Those accounts are aging and we are evaluating various alternatives for collection, including reserves against the accounts or in some cases retaking possession of the product as inventory, and attempting to resell the product to third parties."

Then, on March 31, 2014, Axesstel announced that on March 27, 2014, executive management of the Company concluded that the previously issued unaudited financial statements contained in its quarterly report on Form 10-Q for the quarter ended March 31, 2013, and the two subsequent unaudited quarterly reports on Form 10-Q in 2013 for the periods ended June 30, 2013 and September 30, 2013, should no longer be relied upon because of "errors in those financial statements" related to the "recognition of revenue from sales to two customers in the first quarter of 2013," and that the Company "intends to include restated financial information for the first three quarterly periods in our Annual Report on Form 10-K for the year ended December 31, 2013."

If you purchased Axesstel securities between February 25, 2013 and March 31, 2014, if you have information or would like to learn more about these claims, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at 215-638-4847, Toll-Free at 888-638-4847, or by email to howardsmith@howardsmithlaw.com, or visit our website at www.howardsmithlaw.com.


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