TORONTO, ONTARIO, Aug 28, 2008 (MARKET WIRE via COMTEX) ----Telehop Communications Inc. (TSX VENTURE: HOP) today released its financial results for the second quarter ended June 30, 2008 reporting revenue of $4,250,667 with a net loss of $454,390 or $0.03 per share, compared to revenue of $4,563,561 with net earnings of $255,499 or $0.02 per share for the same period in 2007. The Company completed the quarter with working capital of $2,699,249.

"In late 2007 we commenced a strategic review of our operations and explored all options available to us with a goal to maximize shareholder value," said Hersh Spiegelman President and CEO of Telehop. "This included analysing our existing lines of business, exploring the feasibility of bringing in new lines of business such as voice over the Internet and in addition we assessed various merger and acquisition opportunities. We believe this process has allowed us to identify the best outcome for our company and all our shareholders, which is the acceptance of the offer to acquire our company by Globalive Communications Corp. as we announced on July 23rd. Globalive is continuing with its due diligence review of the Company and we are confident that definitive terms of the merger may be settled by the end of Q3 2008. I would like to thank all shareholders for their support as we work through the due diligence phase with Globalive and at the same time we will continue to refine and execute on the rest of our strategic direction to help ensure the value of our company is maintained."

Operational Highlights:

"As we move into the third quarter our plan is to come out with new and innovative marketing programs aimed at retaining and adding new customers for our casual calling lines of business. This should have the quickest positive impact on revenue." said Hersh Spiegelman. "We are also monitoring our expenses very closely and have made a number of cost reductions. These two initiatives should help us reduce our loss. Our working capital position remains strong at $2.7m."

- Cash and cash equivalents decreased by $406,819 for the second quarter to $1,833,165. The majority of the use of cash was to fund the net loss, after adding back amortization and other non-cash items, of $350,384.

- Revenue of $4,250,667 for the quarter was down 7% from the same period in 2007, attributable to an overall decline in our average rate per minute (ARPM) and stiff competition in the long distance market. For the third quarter the Company plans to introduce new marketing programs to help in its effort to increase revenue mainly in its higher margin casual calling line of business.

- Gross margin, measured as a percentage of revenue, declined to 34% in the second quarter from 41% in the second quarter 2007 attributable to the competitive nature of the long distance market and the lower margins experienced in a number of ethnic markets that were targeted. The Company is cutting back on these lower margin markets and implementing new calling plans in other markets that are expected to be more profitable.

- As part of its strategic review the Company identified an opportunity in the voice over the Internet (VOIP) marketplace and developed an attractive solution that would provide an excellent opportunity for the Company to participate in the evolution and growth of this market. The initiative has been put on hold as the Company is devoting its resources to work with Globalive to complete the sale of the Company and to concentrate on marketing efforts aimed at increasing revenue from its current long distance lines of business.

- Operating expenses increased to $2,138,802 in the second quarter 2008 from $1,509,510 for the same period in 2007. The increase is attributable to:

-- an increase in general and admin of $324,106 due to one time charges for final settlement of legal matters, higher legal costs associated with various corporate matters and corporate consulting fees associated with corporate advisory services.

-- an increase in development and technical expenses of $156,827 a result of the Company receiving an additional $145,000 for an investment tax credit (ITC) in 2007 over 2008 for development projects undertaken in 2006 and completed in 2007. The ITC is recorded as a reduction of the expense to which it pertains in the year received.

-- an increase in marketing and selling expenses of $169,304. The Company plans to continue with the same level of spending in marketing; however advertising is being restructured to push higher margin areas of its casual calling lines of business.

For the detailed financial statements and MD&A, readers should refer to the Company's filings on www.sedar.com.

Cautionary Note Regarding Forward-looking Statements.

Certain statements in this news release may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this news release, such statements use such words as "may", "will", "expect", "believe", "plan", "intend", "are confident" and other similar terminology.

These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under "Risk and Risk Management" in the company's Management Discussion and Analysis filed on SEDAR. Although the forward-looking statements contained in this news release are based upon what management of the Company believes are reasonable assumptions, the company cannot assure investors that actual results will be consistent with these forward looking statements. These forward-looking statements are made as of the date of this news release, and the company assumes no obligation to update or revise them to reflect new events or circumstances.

 Contacts: Telehop Communications
   Inc. Mr. Hersh Spiegelman President and CEO (416) 494-4490 Email: hersh@telehop.com 

SOURCE: Telehop Communications Inc.

mailto:hersh@telehop.com 

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