Farmstead Telephone Group Inc (804331) SEC Filing 10-K Annual report for the fiscal year ending Saturday, December 31, 2005

EX-99
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farm5k99.txt
EXHIBIT 99.1


                                                               Exhibit 99.1

                       FARMSTEAD TELEPHONE GROUP, INC.
                        REPORTS YEAR-END 2005 RESULTS

           FY 2005 Revenues up 23% Over the Same Period Last Year

EAST HARTFORD, CT, April 4, 2006 - Farmstead Telephone Group, Inc. (OTC
Bulletin Board; FTGP) announced operating results for the year ended
December 31, 2005.

      For the year ended December 31, 2005 revenues were $15,203,000, 23%
higher than revenues of $12,344,000 reported for 2004. The Company reported
a net loss for the year of $3,314,000, or $(0.95) per share, compared with
a net loss of $1,424,000, or $(0.43) per share, in 2004. The net loss for
2005 includes a $1,091,000 loss attributable to the start up of One IP
Voice, Inc., the Company's wholly-owned subsidiary which was formed in 2005
to offer carrier-based hosted IP telephony products and services. The
Company attributed its fiscal year 2005 improved revenue results to
increased market penetration for its legacy business systems-related
products and services, particularly from the small-to-medium business
("SMB") market segment which the Company has been targeting, significantly
higher sales of Avaya maintenance contracts, and a larger sales force.

      During 2006, the Company has raised approximately $3 million through
various offerings of convertible debt and convertible preferred stock to
private investors. These funds will be primarily used to further the
development and national deployment of OIPV's products and services.

      Jean-Marc Stiegemeier, Farmstead's Chairman, President and CEO
commented, "2005 represented a period of transition as Farmstead re-aligned
its core business and created a new business direction through the
formation of One IP Voice.

      "During 2005, Farmstead's core business revenues increased 23% over
2004 and revenues continue to increase. We expect to announce for our first
quarter ended March 31, 2006 quarter over quarter 2005 growth of
approximately 80%. This revenue growth illustrates our growing market share
nationally, and validates the investment we made in 2005 to reverse the
downward revenue trend we had been experiencing. To facilitate this revenue
growth and the launch of One IP Voice, we have doubled our employee base
from December 2004.

      "In September of 2005 One IP Voice completed the installation of its
carrier-based VoIP platform. During the fourth quarter of 2005 we turned up
Tier 1 cities nationally, and in January of 2006 we launched our One IP
Voice Hosted offerings nationally. Since our launch ninety days ago, we
have signed distribution agreements with 43 independent business partners
who are now offering One IP Voice products and solutions in Tier 1 and Tier
2 markets nationally. In addition, we also recently entered into a Master
Marketing and Distribution Agreement with Iwatsu Voice Networks of America
whose North American distribution channel consists of 250 independent
business partners selling its products in 450 cities nationwide. Under the
terms of the agreement, Iwatsu Voice Networks now offers One IP Voice
products and services to their nationwide distribution channel. One IP
Voice has quickly deployed one of the largest distribution channels for
Hosted VoIP solutions to the small to medium business segment (SMB) in the
United States, and as a result we expect to attain a significant hosted
VoIP market share in 2006. The One IP Voice 'go to market' strategy has
been validated as evidenced by our nationwide distribution footprint, our
growing backlog of orders and our installed customers who are now enjoying
the benefits of the One IP Voice platform.


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      "In closing, 2005 was a year of change (Shaping the Future) and we
expect that 2006 will be a year that our employees and shareholders
continue to realize the value of our efforts."

      The Company also announced that on April 3, 2006, it filed Form 12b-
25 with the Securities and Exchange Commission requesting an extension to
file its Annual Report on Form 10-K for the year ended December 31, 2005.
The filing delay was attributable to additional time needed by the Company
to complete the valuation, accounting and audit of certain derivative
financial instruments arising from the issuance during 2005 of convertible
notes pursuant to its current credit facility with the Laurus Master Fund
Ltd.

About One IP Voice
------------------
One IP Voice, a wholly owned subsidiary of Farmstead Telephone Group,
provides carrier-based Hosted IP Telephony solutions along with Network
Services. The primary target of the One IP Voice offering is to the Small
to Medium Businesses (SMB) market for the under 200-employee businesses.
The facilities-based One IP Voice offering includes Hosted IP Centrex and
IP Trunking services, bundled with private One IP Voice "Last Mile"
connectivity on a national basis, long distance calling, On Net calling,
local area calling, 911 capabilities and Wide Area Network (WAN) voice and
data connectivity. Further information about One IP Voice may be found at
http://www.oneipvoice.com

About Farmstead
Farmstead Telephone Group, Inc. is a Platinum level member of Avaya's
BusinessPartner program, selling, installing and maintaining both new and
refurbished Avaya business communications products nationwide. Further
information about Farmstead Telephone may be found at
http://www.farmstead.com.

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                                    # # #

This release contains forward-looking statements that involve risks and
uncertainties. In addition to historical information, investors should
consider carefully the risks associated with an investment in the Company's
securities as previously outlined by the Company in its prior filings with
the Securities and Exchange Commission.


Investor Contact:
Sanford Diday or Dave Gentry
Aurelius Consulting Group
407-644-4256
info@aurcg.com
http://www.runonideas.com

Company Contact:
Robert G. LaVigne, CFO
Farmstead Telephone Group, Inc.
Voice: 860-610-6002
Fax:   860-610-6001


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