DIGITAL SOUND CORPORATION ANNOUNCES CONTRACT AND FINANCING DISCUSSIONS
CARPINTERIA, CA, November 24, 1997 - Digital Sound Corporation
(NASDAQ:DGSD) announced today that it has signed a contract with a major
telecommunications provider that calls for sales to the customer of up
to $15 million by the end of 1998 and of up to $50 million by the end of
the first quarter of 2001. Sales under the contract are subject to the
Company's ability to meet certain development milestones, customer
specifications, and other customer requirements and conditions on a
timely basis. Although the Company's goal is to meet these requirements
in a timely fashion, there can be no assurance of its success in doing
so or of its realizing the corresponding revenue.
The Company also announced that it is in discussions with a group of
potential investors who have indicated an interest in purchasing up to
an aggregate of $15-$20 million of convertible preferred stock and
convertible debt of the Company at a price of $0.75 per share on an
as-converted basis. Any such transaction would be dependent on the
Company's ability to reach definitive agreements with the potential
investors and to satisfy certain regulatory requirements. As a result,
there can be no assurance that any such transaction will be consummated
on these terms, or at all. The Company does not anticipate making
further announcements concerning these discussions until such time as
definitive agreements are executed or the discussions are terminated.
As reported in the Company's Form 10-Q for the quarterly period ended
September 30, 1997, if the Company is unable to obtain needed financing,
it may be required to undertake strategic or restructuring alternatives
that could provide little or no return to the current holders of the
Company's common stock.
About Digital Sound
A leading ISO 9001-certified supplier of network-based,
communication-management solutions, Digital Sound gives people the
freedom to manage voice, fax and e-mail messages anytime, anywhere,
using a telephone, personal computer, fax, or pager. Digital Sound's
product line integrates enhanced computer/telephony/Internet
applications on an open systems platform, giving its customers -- public
network service providers -- a strategic advantage in a highly
competitive telecommunications marketplace. Digital Sound is
headquartered in Santa Barbara County, California and can be found on
the Internet at www.dsc.com. |
