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To: tonto who wrote (24297)	11/11/1999 6:45:00 AM
From: tonto	Respond to of 26163

Off topic: DCI Newsletter October 29, 1999 Dear Friend of DCI: On behalf of the Board of Directors, I want to thank each and every one of you for the overwhelming support that you have shown DCI during these turbulent times. Despite certain roadblocks, your company is forging ahead with its plans, especially in Europe. As discussed at the Annual Meeting, DCI is aggressively moving to eliminate marginal and or "loss leader" sales. In the first quarter of the fiscal year 2000 you will note that DCI experienced a negative gross margin of $605,166, primarily attributable to prep aid products. A company of our size cannot afford to operate on that basis. Gaining market share while accumulating losses may be the "game plan" for larger companies with the ability to offset losses via sales from other sectors, but it is not for DCI. Under the new directive, a review of DCI's subsidiary companies has been completed and marginal or unprofitable businesses are being targeted for elimination. Each subsidiary company is now focused on the business opportunities and customers, which will be profitable. As part of this marketing oriented reorganization, Edge Communications has modified its method of doing business and in conjunction with Qwest Communications is now marketing its prep aid products in a more cost conscious manner. As a result ~f this new business approach, Edge will also be able to effect business economies which will be reflected in the fourth quarter of the fiscal year ending March 31, 2000. With respect to the sale of Cyberfax, as indicated in our footnotes of the IOQ for June 30, 1999, DCI holds 5,000,000 shares of Smartfax. After Smartfax goes public, DCI will distribute these shares to its shareholders as of a future record date that will be announced in coordination with the proposed Initial Public Offering. DCI is cooperating with the Securities and Exchange Commission during their investigation of the Company. We are hopeful to reach a resolution in order to return our undivided attention to growing your company. One of the lingering effects of the temporary trading suspension and on-going investigation has been to suppress DCI's ability to finance our expansion plans. On the litigation front, Talk Visual Corp. and Michael Zwebner withdrew their $30 million lawsuit in California against DCI, its officers and directors as well as several shareholders. In addition, Zwebner and Overseas Communications, Ltd. lost a separate lawsuit against the Company in Nevada, which they appealed. The Harris 20/20 switch has been installed at the co-location site of Level 3 Communications in London. Cross connections to major carriers are being completed and traffic will commence flowing through the switch. On a separate matter, Deloitte & Touche notified the Company in a one-sentence letter, that it was ceasing its relationship with the Company. We had no accounting disputes with this firm and can only surmise that it is "corporate policy" to terminate the client- auditor relationship if a client has been under scrutiny. We are currently seeking an acceptable accounting firm to replace them as DCI's auditors. In a move to strengthen the Company, DCI is pleased to announce that Clifford Postelnik, an attorney fluent in five languages, was recently elected to the Board of Directors. Mr. Postelnik was also appointed the Managing Director of European Operations. In addition, Daniel J. Murphy was appointed CFO of European Operations. Previously, Mr. Murphy, who holds an MBA degree from the University of Connecticut, held the positions of Vice President Financial Planning and Vice President of Investor Relations in the Company. In addition, the Company has retained the public accounting firm of Orange & Martorelli, LLP to assist in an internal accounting function. In a related matter also aimed at strengthening the Company and providing for succession, John J. Adams and Larry Shatsoff were each promoted to the office of Executive Vice President. Mr. Adams was previously Vice President and Chief Marketing Officer, while Mr. Shatsoff was Vice President and Chief Operating Officer. I remain as President & CEO, but as I have announced on previous occasions, it is my intention to take a reduced role in the Company. Sincerely, Joseph J. Murphy President & CEO