Fonix Update on G-Soft Acquisition
Chinese Government Approvals in Process
SALT LAKE CITY, UT--(Marketwire - September 29, 2008) - Fonix Corporation announces the Chinese government approvals are nearing completion for the acquisition by Fonix' subsidiary of 80% of the common stock of G-Soft Ltd, the sole shareholder of Shanghai Gaozhi Software Systems Limited, a rapidly growing software developer and solutions provider in 2G (second-generation) and 3G (third-generation) mobile networks in China and throughout the Asian Pacific region. The remaining 20% will be acquired by funds managed by Southridge, LLC. Total consideration includes cash, Fonix Series L convertible preferred stock contributed by Southridge, Series P convertible preferred stock issued by Fonix, and a promissory note. The closing is subject to final due diligence review and certain governmental approvals.
GaozhiSoft has recently announced its first 3G contract with China Telecom, one of the three 3G mobile network service providers in China. This contract with China Telecom is for 8 of 29 provinces of China. GaozhiSoft provides 2G and 3G network OSS software and services to all three Chinese mobile network service providers, including: China Mobile, China Unicom, China Telecom, and fix line carriers China Netcom and China Digital. In addition, GaozhiSoft is the exclusive Chinese XFS and HFS mediation software provider to Alcatel-Lucent for Asia market.
"GaozhiSoft continues to implement and execute its business plan with the major Chinese mobile service providers," said Roger D. Dudley, Fonix President and CEO. "Gaining a foothold on the 3G implementation in China is a significant achievement for GaozhiSoft and will provide a significant platform for growth with their reference customers. GaozhiSoft is profitable and we believe it will continue to grow rapidly, eventually providing a gateway to the Chinese market for Fonix speech technologies. We see that conduit as a major asset for Fonix."