CHATSWORTH, Calif., Nov. 1, 1999 (PRIMEZONE) -- FocusWireless.com (Nasdaq:FONE) announced today that it has completed its merger with Cellular Wholesalers, Inc., (CWI), a privately held wholesale distributor of wireless phone products. CWI's shareholders received $5,000,000 in cash and issued 2,250,000 shares of FocusWireless.com common stock. In conjunction with the merger, the Company raised $5,000,000 (subject to possible increase for the placement agent's over-allotment option) in equity in a private placement of convertible notes and $1,000,000 of subordinated debt. The combined company will continue to be traded on NASDAQ under the FocusWireless.com stock symbol, FONE.
"By coupling the industry knowledge, relationships, and a B2B e-commerce strategy of FocusWireless.com with the broad customer base and information systems of CWI, we have created an exciting and aggressive new entity in the wireless telecom industry," said Michael Hedge, president and chief executive officer of FocusWireless.com. "CWI also brings us an excellent management team, a brand new operations facility, and direct manufacturer relationships, which will create new opportunities for revenue growth."
Ronald Goldberg, president of CWI, said, "FocusWireless.com offers us tremendous Internet e-commerce innovations which we believe will be well received by our customers. By transitioning our customers to the efficient 'virtual marketplace' created by FocusWireless.com, we will enable them to save both money and time. With cutting edge technology and innovative programs, we expect our newly combined entity to become a true leader with e-commerce in the wireless telecom industry."
Mssrs. Hedge and Goldberg explained that the wireless industry is currently undergoing rapid changes. "The growth in the wireless industry is explosive," stated Hedge, "but the technology to facilitate this growth has lagged behind. No longer will customers have to fax and phone orders or tie up their capital by maintaining a large inventory. We will provide a web-site with online catalogs and ordering processes to ensure just-in-time inventory solutions. Online activation and product provisioning will be the next standard for the industry-and we are proud to be one of the first to provide the capability for our wireless business customers."
FocusWireless.com received shareholder approval of the merger at its annual meeting on September 29, 1999.
Last week FocusWireless.com announced its new agreement with the Telecom Resellers Association (TRA) to be the only authorized provider of wireless handsets and accessories through an Extranet site available exclusively to the TRA's 800 business members. The site, capable of handling significant growth will be introduced to the TRA membership at its Fall Conference being held this week in Dallas. CWI's operational infrastructure will play a key role in executing this agreement.
The Company's Internet e-commerce site, www.focuswireless.com has begun offering some of its web-site benefits to a select group of customers. A more complete capability offering to the Company's entire customer base is scheduled for early 2000.
About FocusWireless.com FocusWireless.com will be offering the wireless telecom industry an e-commerce solution that provides end-to-end transaction management for its business-to-business customer base. The Company will facilitate the sale of wireless products and offer innovative value-added services for its "B-to-B" customers, which include carriers, resellers, retailers, dealers and manufacturers. The Company intends to continue its expansion by targeting existing and emerging wireless telecom distribution channels and will offer comprehensive web-based solutions that will allow more companies reduced barriers to entry of retailing wireless telecom products.
About CWI Cellular Wholesalers Inc., commonly known as CWI, is a metropolitan Chicago-based pioneer in the wireless distribution industry, founded in 1987. Since then, its annual revenues have grown to more than $80 million in its fiscal year ended September 30, 1998, positioning the company as a solid industry competitor. Earlier this year, CWI invested in a new 60,000-square foot distribution center and made a substantial investment in its information systems. These improvements prepared CWI for new value-added distribution opportunities. CWI's management team has developed direct relationships with several leading manufacturers in the industry. CWI's current product offerings include wireless handsets, accessories, pagers and two-way communications products.
Statements included within this press release that are not historical in nature constitute forward-looking statements for the purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Investors are cautioned that this press release contains certain such forward- looking statements that involve substantial risks and uncertainties. When used, the words "anticipate," "believe," "estimate," "expect" and similar expressions as they relate to the Company or its management are intended to identify such forward looking statements. The Company's actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward looking statements. Risks include potential delays in the completion of developing the Internet and Extranet e-commerce solutions, unanticipated costs to develop and maintain the system and potential lack of customer acceptance of this order processing method and risks associated with pressures caused by liquidity pressures from additional debt, and risks associated with the integration of the Company and CWI in a merger of information systems, operations and personnel. Further management discussion of risks and uncertainties can be found in the Company's quarterly filings with the Securities and Exchange Commission and other periodic filings.