TLL Proshares Ultrashort Telecommunications

Teletouch Communications, Inc. (AMEX:TLL), announced today that the Company will restate its interim financial statements for fiscal year 2006 second and third quarters ended November 30, 2005 and February 28, 2006. The Company's determination to restate the results of these quarters was a result of an analysis of the fiscal year end tax consequences of the November 2005 conversion by TLL Partners, LLC of 1,000,000 shares of the Company's Series C preferred stock into 44,000,000 shares of the Company's common stock (the "Conversion"), which resulted in TLL Partners owning a controlling interest at approximately 89.2% of the Company. TLL Partners, LLC, ("TLLP") is a Delaware limited liability company owned by Progressive Concepts Communications, Inc. ("PCCI"). Prior to November 2005, PCCI filed a consolidated tax group return with its wholly-owned subsidiaries, Progressive Concepts, Inc. ("PCI"), State Hawk Security, Inc. ("SHS") and TLLP. Effective November 1, 2005, the Company became a member of the PCCI tax group, as PCCI gained voting control of the Company through the Conversion. In accordance with the related IRS rules and regulations, members of an affiliated corporate group with greater than 80% voting control must be included in a consolidated tax return. The Company accounts for its taxes under Statement of Financial Accounting Standard 109 ("SFAS 109"), which resulted in the Company's recording a net deferred tax asset as of November 30, 2005 of approximately $142,000. As a result of joining the PCCI tax group, the Company should have recorded an additional valuation allowance that would have the effect of reducing the net assets of the Company by $142,000 resulting in an increase to the Net Loss reported for the three months ended November 30, 2005 from $122,000 to $264,000. The Company has evaluated the effect of the foregoing technical error and although non-cash related in nature, has deemed the effect as material to the financial statements for the fiscal quarters ended November 30, 2005 and February 28, 2006, thereby requiring the restatements. Therefore, until the Company has restated and reissued its results for the applicable periods, investors and other users of the Company's SEC filings are cautioned not to rely on the Company's financial statements for the fiscal quarters ended November 30, 2005 and February 28, 2006, to the extent they are affected by the accounting issue described above. The Company intends to file its amended and restated financial statements with the SEC as soon as possible after the completion of its discussions with the SEC staff in regard to the technical accounting issues at hand. The expected effect of the aforementioned adjustments to the Company's financial statements is shown below: -0- *T Selected Balance Sheet Captions ($000's) November 30, 2005 February 28, 2006 As As Reported Adjustment Restated Reported Adjustment Restated --------------------------- ---------------------------- Total Assets $ 9,518 $ (142)$ 9,376 $ 9,445 $ (176)$ 9,269 --------------------------- ---------------------------- Total Shareholders' Equity $ 2,745 $ (142)$ 2,603 $ 2,842 $ (176)$ 2,666 --------------------------- ---------------------------- Selected Income Statement Captions ($000's except per share amounts) Three Months Ended Six Months Ended November 30, 2005 November 30, 2005 As As Reported Adjustment Restated Reported Adjustment Restated --------------------------- ---------------------------- Provision for income taxes $ - $ 142 $ 142 $ - $ 142 $ 142 --------------------------- ---------------------------- Net loss $ (122)$ (142)$ (264)$ (553) $ (142)$ (695) --------------------------- ---------------------------- Basic and diluted loss per share $ -= $ - $ - $ - $ - $ - --------------------------- ---------------------------- Three Months Ended Nine Months Ended February 28, 2006 February 28, 2006 As As Reported Adjustment Restated Reported Adjustment Restated --------------------------- ---------------------------- Provision for income taxes $ - $ 34 $ 34 $ - $ 176 $ 176 --------------------------- ---------------------------- Net income (loss) $ 19 $ (34)$ (15)$ (534) $ (176)$ (710) --------------------------- ---------------------------- Basic and diluted loss per share $ - $ - $ - $ (0) $ (0)$ (0) --------------------------- ---------------------------- *T About Teletouch Communications Teletouch offers a comprehensive suite of telecommunications services, including cellular, two-way radio communications, GPS-telemetry and wireless messaging services throughout the United States. TLL acquires, bills and supports a large, primarily commercial business and government base of subscribers, under its own network of FCC licensed spectrum in Texas, Louisiana, Arkansas, Oklahoma, Alabama, Missouri, Mississippi, Tennessee, and Florida. Teletouch's common stock is traded on the American Stock Exchange under stock symbol: TLL. Additional information about Teletouch can be found at: www.teletouch.com. All statements in this news release that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the caption "Additional Factors That May Affect Our Business" in the Company's most recent Form 10-K and 10-Q filings, and amendments thereto. In addition, we operate in a highly competitive and rapidly changing environment, and new risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise any forward-looking statement.