dba Telecom Completes Conversion of Limited Partnership
dba Telecom Corporation
CDNX: DBA
DBA COMPLETES CONVERSION OF LIMITED PARTNERSHIP
April 5, 2000: North Vancouver, B.C. -- dba Telecom Corporation (CDNX: DBA) announces that it has completed the purchase of the interest in SmarTalk Limited Partnership, originally announced on March 3, 2000. Under the transaction, dba Telecom has acquired the interest of the sole limited partner, Sutton Group Financial Services Ltd. ("Sutton"), for 732,759 shares of dba Telecom.
SmarTalk Limited Partnership ("SLP") was established in 1995, through an investment of $485,000 by Sutton, to finance plastic moulds used in the production of dba Telecom's NRG telephones. The SLP received royalty payments from dba Telecom based on sales of dba's SmarTalk NRG telephones. As provided under the agreement between the parties, Sutton exercised its put option to convert into shares of dba Telecom. An independent appraisal has been conducted on the SLP and it established a value of $425,000. Based on a trading average of dba Telecom shares of $0.58 per share, a total of 732,759 common shares are being issued to Sutton. The transaction has received approval from the Canadian Venture Exchange.
The conversion of the SLP also triggers the validity of "B" share purchase warrants (the "B warrants") which were granted in November, 1998 as part of a private placement. The terms of the B warrants provide that the holders may exercise up to 1.5 times the number of shares issued upon conversion of the SLP to a maximum of 6,060,111. Accordingly, 1,099,139 may now be exercised and the balance of 4,960,972 are void and no longer valid. The B warrants may be exercised at a price of $0.1896 per share up to November 25, 2000.
Garry Hines, CEO of dba Telecom Corporation, said "this transaction provides a number of positives for us including significant cash savings as ongoing royalty payments are no longer required, and crystallizing the number of shares to be issued under the Partnership agreement. In addition, the conversion of the partnership and the cancellation of a large number of B warrants reduces our fully diluted share position by a net amount of more than 4 million shares. It also provides us with the opportunity to raise more capital through existing shareholders who have been very supportive of the company and our plans."
"The conversion of the Partnership dovetails very nicely with our strategic plans to solidify our shareholder base and expand the markets for our products. The extensive market research and customer reviews we have conducted over the past months are directing our expanding product portfolio."
dba Telecom Corporation delivers innovative telephony solutions to its customers around the world. As "The SmarTalk Company", dba Telecom provides a unique range of intelligent network handsets for use in a variety of applications in the Centrex and Communication Server markets. The company has "one office in five countries" to serve its customers. Sales and Technical Support are located in Atlanta, Hong Kong, London and Sydney with Engineering, Marketing and Administration located in Vancouver. The company's shares are traded on the Canadian Venture Exchange under the symbol DBA.
For more information, call 1-800-663-4476 (US toll free), or 1-604-903-3900 or visit our website at www.dbatele.com.
For and on behalf of the Board of Directors
John R. Henderson
Director
The Canadian Venture Exchange has neither approved nor disapproved the information contained herein.
Contact:
dba Telecom Corporation - Investor Relations
Tel: 1-877-645-4848 tollfree or (604) 257-4262
Fax: (604) 608-2949
Email: invest@dbatele.com |
