DFTS Defense Technology Systems Inc (CE)

SkyLynx Communications (OTCBB:SKYC), a worldwide provider of secure, high-availability, dedicated wireless data networks for fixed and mobile applications, announced today that it has entered into a Definitive Agreement for the acquisition of Digital Computer Integration Corporation (DCI) in an all-stock transaction. Under the terms of the agreement, SkyLynx will acquire 51% of DCI from Defense Technology Systems (OTCBB:DFTS) for 572,776 shares of SkyLynx Series B Convertible Preferred Stock and assignment of NewMarket Technology Series G Preferred Stock held by DCI. SkyLynx will acquire the remaining 49% of DCI from its founders for 248,518 shares of SkyLynx Series C Preferred Convertible Stock. As part of the transaction, NewMarket Technology will assign DCI debt that it is owed to DFTS. The founders will receive an additional 3,500,000 shares of escrowed SkyLynx Series C Preferred Convertible Stock, should certain performance criteria be met. The transaction is expected to close by January 31, 2006. DCI acts as a system integrator for a diversified base of commercial and government customers. It currently has four distinctive business segments. DCI's Contract Electronic Manufacturing segment procures, assembles, configures, loads software, tests and burns-in computer systems for a wide range of high level applications. These applications include communications systems and flight simulators. Its Rugged Mobile Computing segment has developed a line of specialized computers, designed specifically for the harsh environments required for applications such as first responders and the military. DCI's Tracking Systems segment has developed a GPS based tracking system that can be used effectively in stealth applications. The Company's Radio Frequency Identification (RFID) segment can make applications such as RFID inventory control and asset tracking practical. All DCI business segments provide the necessary core technology to support numerous commercial and Homeland Security programs. Steven D. Smith, SkyLynx COO, stated, "We have been aggressively pursuing acquisition opportunities that can compliment out our base of technology while adding new sales and distribution channels. DCI fits well into our strategy. By packaging their products and solutions with our 150MHz radio modems in dedicated deployments we can provide greater value to the customer and enjoy long term residual revenue. The DCI acquisition will increase our revenue base by approximately $6 million immediately with the potential to grow exponentially. Sharing common engineering, sales and administrative resources will allow us to be more efficient and productive. The momentum and market traction developed by the combined companies can have a positive impact on the SkyLynx share volume and share price, building shareholder value." Zenon, "Bud" Maciekowicz, founder and president of DCI, said "This transaction gives us additional technical and management support as well as giving us the financial resources to realize DCI's true market potential. The business combination will allow us to leverage our GPRS Tracking product sales to deliver location and status information to the customer through the existing SkyLynx data network, opening up additional channels for ongoing residual revenue for both SkyLynx and DCI." Smith concluded, "We believe that there are opportunities to acquire other companies that offer additional growth potential with the application of our technology - not only in obvious commercial markets and homeland security but also in less obvious markets such as pet and child care. The benefit to us is through unlimited market potential, substantial profit and cash flow, but will also make us less vulnerable to industry cycles." About SkyLynx (www.skylynx.com) SkyLynx Communications, Inc., based in Sarasota, FL, provides wireless, data-only network services for mobile and static applications, including vehicle tracking, security, remote equipment systems operations and weather monitoring. The company's network, SkyLynx FlexNet, is being deployed on a national basis and has been applauded for providing cost-effective, broad geographic coverage that is significantly less expensive than satellite tracking. SkyLynx FlexNet is unaffected by trees, buildings or topographical variations, and its 80-mile range is far greater than that of cellular and 3G systems, making it an outstanding Automatic Vehicle Location and fleet management system. Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. In particular, the Company's statements regarding trends in the marketplace and potential future results are examples of such forward-looking statements. The forward-looking statements include risks and uncertainties, including, but not limited to, the timing of projects due to the variability in size, scope and duration of projects, estimates made by management with respect to the Company's critical accounting policies, regulatory delays, clinical study results which lead to reductions or cancellations of projects, and other factors, including general economic conditions and regulatory developments, not within the Company's control. The factors discussed herein and expressed from time to time in the Company's filings with the Securities and Exchange Commission could cause actual results and developments to be materially different from those expressed in or implied by such statements. The forward-looking statements are made only as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.