Teleconnect, Inc. Releases Operational Update for Shareholders

  
    
  
  
    
      Teleconnect, Inc. (OTCBB:TLCO) announced an operational update to the 
      company’s shareholders regarding the recently 
      released 10-Q and significant balance sheet improvements.
    
    
      In the last 10-Q, the Company reported net income of $327,000 for the 
      quarter ended March 31, 2007. In the six month period ended March 31, 
      2007, accounts payables have been reduced by 56% from $2.67 Million to 
      $1.18 Million and accrued liabilities have been reduced by 35% from 
      $992,000 to $646,000. Significantly, total assets increased 98% from 
      $1.42 Million to $2.81 Million.
    
    
      In addition, Teleconnect, Inc. with the aid of majority shareholders, 
      reduced its long-term debt by $1.49 Million, or 46%, in the six-month 
      period ended March 31, 2007. Majority shareholders have extinguished 
      $1.49 Million (US) in debt in exchange for equity at a conversion price 
      of $0.10 per share, representing a 100% premium to the current market 
      price.
    
    
      Teleconnect Inc. President, Gustavo Gomez said, “The 
      results of our ongoing efforts to build profitability and increase 
      shareholder value is reflected in the improved financial results for 
      this past quarter ended March 31, 2007. Teleconnect’s 
      plans for future growth have prompted our majority shareholders to show 
      a strong vote of confidence in exchanging debt for equity under very 
      attractive terms for the company.”
    
    
      The significantly improved balance sheet readies the company for future 
      growth; next to the substantial organic growth the company is 
      experiencing, Teleconnect is in advanced talks with potential 
      acquisition candidates to faster reach its strategic goals.
    
    
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      About Teleconnect:
    
    
      Teleconnect Inc. through its wholly-owned subsidiary Teleconnect 
      Comunicaciones S.A., a Spanish telecommunications company, is a major 
      player in the prepaid telecoms industry in Spain. Teleconnect Inc. is 
      traded on a U.S. stock exchange, the Over The Counter Bulletin Board 
      (OTCBB) with trading symbol TLCO. Teleconnect provides commercial, 
      residential and tourist users in Spain with a very competitive array of 
      prepaid services. Teleconnect provides prepaid services for a highly 
      defined market segment- customers who require individualized, 
      multicultural and multilingual attention.
    
    
      http://www.teleconnect.es/en/index.jsp
    
    
      Forward Looking Statements:
    
    
      Except for the historical information contained herein, the 
      statements in this press release are forward-looking statements that 
      involve risks and uncertainties. Potential risks and uncertainties 
      include, without limitation, continued competitive pressures in the 
      marketplace; the effect competitive and economic factors and the 
      Company's reaction to them may have on consumer and business buying 
      decisions with respect to the Company's products; the ability of the 
      Company to make timely delivery of new products and successful 
      technological innovations to the marketplace; the continued availability 
      of certain components and services essential to the Company's business 
      currently obtained by the Company from sole or limited sources. More 
      information on potential factors that could affect the Company's 
      financial results is included from time to time in the Company's public 
      reports filed with the SEC.