WESTLAKE VILLAGE, Calif., Oct. 19 /PRNewswire/ -- Coyote Network Systems, Inc. (OTC Bulletin Board: CYOE) today announced it has signed a letter of intent to take a 19% equity position in DTA Communications Network, a facilities-based provider of wholesale international long distance services, primarily to India, Pakistan, Bangladesh, and Caribbean markets.
Under terms of the agreement, Coyote will pay $1,400,000 in equal amounts of cash and Coyote Network Systems common stock in exchange for 19% of the shares of DTA Communications Network. In addition, Coyote Network Systems will be granted an option to increase its position in DTA Communications Network on a formula based on earnings growth. The agreement is subject to various closing conditions and is expected to close by the end of this quarter.
"DTA Communications Network is positioned to take advantage of new opportunities in the international long distance marketplace," said Robert J. Donahue, president and chief executive officer, DTA Communications Network. "Our relationship with Coyote will enable us to be more cost competitive by sharing facilities and better carrier pricing."
"Our strategy for growth is to model the best of the international long distance carrier initiatives that provides for high growth and domestic reach and to complement that effort with affinity-based services," said Daniel W. Latham, president and chief operating officer, Coyote Network Systems. "We are leveraging our core switching technologies in the international long distance and affinity-based service businesses. We expect to realize synergies and cost savings by interconnecting local carriers with domestic and international long distance providers. We look forward to our relationship with DTA Communications Network."
About DTA Communications Network
DTA Communications Network markets international long distance services to other U.S.-based carriers, pre-paid debit card companies, Telecom Reseller Association facilities-based carriers, switchless resellers, Fortune 500 companies, and financial institutions. DTA Communications Network has international gateway switching facilities in New York, Los Angeles and Miami and a point of presence in Houston. DTA Communications Network is cost- competitive in the U.S. market due to satellite and fiber optic back-haul agreements and offers competitively priced high quality telecom services to a number of international locations. DTA Communications Network is fully licensed by the FCC.
About Coyote Network Systems
Headquartered in Westlake Village, CA, Coyote Network Systems (CNS) provides telecom equipment and network services that enable and deliver local, long distance and Internet services. Coyote Technologies provides scalable Class 4/5 telecom switches and IP (Internet Protocol) gateway systems. Headquartered in Houston, TX, American Gateway Telecommunications provides international long distance services to carriers. Headquartered in Los Angeles, CA, Interactive Network Systems markets international long distance services to more than 17,000 customers, primarily to French and Japanese affinity groups. CNS is authorized to provide competitive local exchange carrier (CLEC) services in California. For more information, please visit the Company's Web site: http://www.cyoe.com, or call 1-818-735-5312.
The statements in this news release may be considered "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to be materially different from any future performance suggested in this news release. Such factors include, but are not limited to, actual and potential competition, risks associated with consolidation in the industry and with international expansion, general and economic conditions, the need to manage growth, and certain product, technology and regulatory risks. For more information, please refer to the Company's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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