8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 7, 2010

UTSTARCOM, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-29661	52-1782500
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

20F, Tower E1, The Towers, Oriental Plaza

No. 1 East Chang An Avenue

Dong Cheng District

Beijing, P.R. China

Post code: 100738

(Address of principal executive offices)          (Zip code)

+86 (10) 8520-5588

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement.

On February 4, 2010, UTStarcom, Inc. (the “Company”) filed a Current Report on Form 8-K reporting that on February 1, 2010, it had entered into a Common Stock Purchase Agreement (the “BEIID Agreement”) with Beijing E-town International Investment and Development Co., Ltd. (“BEIID”), and a Common Stock Purchase Agreement (together with the BEIID Agreement, the “Purchase Agreements”) with Elite Noble Limited and Shah Capital Opportunity Fund LP (collectively with BEIID, the “Investors”), pursuant to which the Company proposed to issue and sell common stock to the Investors in a private placement transaction (the “Placement”).  The Purchase Agreements were subsequently amended on May 4, 2010, June 4, 2010 and July 7, 2010, respectively.

On September 7, 2010, the Company and the Investors entered into a fourth amendment to each of the Purchase Agreements (collectively, the “Fourth Amendments”) to reduce the per share purchase price and to make certain adjustment to the number of shares sold under the Purchase Agreements.  Under the terms of the Fourth Amendments, the Company and the Investors agreed to reduce the purchase price from US$2.20 per share to US$2.027 per share and adjust the number of shares sold to each of the Investors.  The Fourth Amendments also provided that Elite Noble Limited, one of the Investors, may purchase up to an additional 3,972,251 shares within the next two months at $2.027 per share if the purchase takes place on or prior to October 7, 2010 and at US$2.047 per share if the purchase takes place between October 8, 2010 and November 8, 2010.

Copies of the Fourth Amendments are attached as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8-K and are incorporated by reference herein.

Item 3.02               Unregistered Sales of Equity Securities.

On September 7, 2010, the Company completed the issuance and sale of an aggregate 18,073,202 shares of its common stock, par value $0.001 per share, for an aggregate of $36,633,597 pursuant to the Purchase Agreements, as amended to date (the “Closing”).  On the same date, the Company also granted Elite Nobile Limited an option to purchase up to an additional 3,972,251 shares until November 8, 2010. The purchase price for such shares would also be $2.027 per share if the purchase takes place on or prior to October 7, 2010 and US$2.047 per share if the purchase takes place between October 8, 2010 and November 8, 2010.

The Shares were offered solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act of 1933, as amended (the “Act”), in reliance on the exemptions from registration afforded by Section 4(2) of the Act.

On September 7, 2010, the Company issued a press release announcing the Closing.  The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.

In connection with and effective upon the Closing, the total number of directors on the Company’s board of directors was increased from six to seven, and Mr. Baichuan Du, a former Deputy Chief Engineer of China’s State Administration of Radio, Film and Television, Mr. Xiaoping Li, Executive Deputy General Manager of BEIID, and Mr. William Wong, a Managing Director at

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Yellowstone Capital, joined the Company’s board of directors.  Mr. Li is the designee for BEIID pursuant to the Stockholders Rights Agreement entered into by and between the Company and BEIID on February 4, 2010.  Messrs. Li and Wong replaced Mr. Allen Lenzmeier and Mr. Jeff Clarke, respectively, who resigned from the Company’s board of directors upon the Closing.  The Company’s board of directors has appointed Mr. Li to the audit committee and Mr. Du to the compensation committee of the Company’s board of directors upon the Closing. The Company will enter into a standard form of indemnification agreement with each of Mr. Du, Mr. Li and Mr. Wong.

In connection with the Closing, the Company’s former Chief Operating Officer, Mr. Jack Lu, age 47, was appointed as the Company’s Chief Executive Officer, effective upon the Closing.

Mr. Lu has served as the Company’s Chief Operating Officer since March 2010. From August 2008 until joining the Company, Mr. Lu worked as an entrepreneur seeking to establish a renminbi denominated investment fund to invest in high technology companies in southwest China. From July 2007 to July 2008, Mr. Lu served as Global Co-Chief Operating Officer and General Manager of China Operations for Source Photonics, Inc., an optoelectronics components company. From September 2001 until June 2007, he served in a number of senior management positions, including most recently as President and Chief Executive Officer from January 2007 to June 2007 and Chief Operating Officer from June 2006 to December 2006, of Fiberxon Inc., an optical telecom components company, which was acquired by MRV Communications Inc., a communications equipment and services company, in July 2007. From 2000 until 2001, Mr. Lu served as Director of Business Strategy Development for US Business Networks Inc. (MeetChina.com), a business-to-business portal provider. From 1988 to 1998, Mr. Lu served in a number of management positions with China National Technical Import and Export Corporation, an import/export, manufacturing and consulting firm.  Mr. Lu received a B.S. in Electrical Engineering from Huazhong University of Science and Technology in China and holds an M.B.A. from the University of Southern California.

Pursuant to the employment offer letter dated February 1, 2010 by and between the Company and Mr. Lu (the “Offer Letter”), as amended on February 10, 2010 (the “Offer Letter Amendment”), after Mr. Lu has become the Chief Executive Officer, his base salary will be increased from RMB 2,726,653 to RMB 3,067,485 and Mr. Lu will be eligible for a performance target bonus of 100% of his base salary. The full text of the Offer Letter and the Offer Letter Amendment were filed as an exhibit to the Company’s Current Reports on Form 8-K filed on February 4, 2010 and February 22, 2010, respectively, and are incorporated herein by reference.

The board of directors of the Company has appointed Mr. Lu to the board, effective upon the Closing, when Mr. Lu assumed the Chief Executive Officer position, to replace Mr. Peter Blackmore.

Mr. Blackmore resigned as President and Chief Executive Officer of the Company and resigned from the Company’s board of directors effective as of September 7, 2010.  The Company and Mr. Blackmore have agreed that Mr. Blackmore’s resignation as President and Chief Executive Officer of the Company is for “good reason” under the Change of Control/Involuntary Termination Severance Agreement with Mr. Blackmore, effective July 2, 2007 (the “Blackmore Severance Agreement”), which was subsequently amended and restated on January 30, 2008 to bring the agreement into compliance with Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended, and amended again on December 17, 2008 for Section 409A compliance.

Pursuant to the Blackmore Severance Agreement and subject to certain conditions,  Mr. Blackmore would be entitled to the following severance benefits after he terminates his employment with the Company: (i) twelve (12) months of base salary as in effect as of the date of such termination, less applicable withholding, (ii) one hundred percent (100%) of his full annual performance target bonus for 2010, (iii) all equity awards, including without limitation stock option grants, restricted stock and stock purchase rights, granted to him by the Company shall become fully vested, or, as applicable, released from the Company’s repurchase right and exercisable as of the date of the termination to the extent such

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equity awards are outstanding and unexercisable or unreleased at the time of such termination, (iv) such equity awards shall be exercisable until the earliest of (a) twelve (12) months from his date of termination, (b) the latest date the equity award could have expired by its original terms under any circumstances, (c) the tenth (10th) anniversary of the original date of grant of the equity award, or (d) the date provided for under the equity plan under which the award was granted, (v) all Mr. Blackmore’s outstanding restricted cash awards shall become fully vested, and (vi) an amount equal to twelve (12) months of health insurance premiums for continuation coverage under COBRA at the same level of health (i.e., medical, vision and dental) coverage and benefits as in effect for Mr. Blackmore on the day immediately preceding the day of his termination of employment.

On September 7, 2010, the Company issued a press release announcing the new directors and new Chief Executive Officer.  The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01               Financial Statements and Exhibits.

(d)               Exhibits

Exhibit Number	Description
10.1	Fourth Amendment to Common Stock Purchase Agreement dated February 1, 2010, as amended on April 30, 2010, June 4, 2010 and July 7, 2010, by and between the Company and Beijing E-town International Investment and Development Co., Ltd.
10.2	Fourth Amendment to Common Stock Purchase Agreement dated February 1, 2010, as amended on April 30, 2010, June 4, 2010 and July 7, 2010, by and among the Company, Elite Noble Limited and Shah Capital Opportunity Fund LP
99.1	Press Release dated September 7, 2010

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	UTSTARCOM, INC.
Date: September 13, 2010	By:	/s/ Jack Lu
	Name:	Jack Lu
	Title:	Chief Executive Officer

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Exhibit Number	Description
10.1	Fourth Amendment to Common Stock Purchase Agreement dated February 1, 2010, as amended on April 30, 2010, June 4, 2010 and July 7, 2010, by and between the Company and Beijing E-town International Investment and Development Co., Ltd.
10.2	Fourth Amendment to Common Stock Purchase Agreement dated February 1, 2010, as amended on April 30, 2010, June 4, 2010 and July 7, 2010, by and among the Company, Elite Noble Limited and Shah Capital Opportunity Fund LP
99.1	Press Release dated September 7, 2010

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EX-10.1

Exhibit 10.1

UTSTARCOM, INC.

FOURTH AMENDMENT TO COMMON STOCK PURCHASE AGREEMENT

This FOURTH AMENDMENT (this “Amendment”) to the Common Stock Purchase Agreement dated as of February 1, 2010, as amended on April 30, 2010, June 4, 2010 and July 7, 2010 (the “Agreement”), by and between UTStarcom, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Company”), and Beijing E-Town International Investment and Development Co., Ltd., a company incorporated under the laws of the People’s Republic of China (the “Purchaser”), is made and entered into as of September 7, 2010.  Capitalized terms used and not otherwise defined in this Amendment shall have the meanings ascribed to them in the Agreement.

RECITALS

WHEREAS, Section 2.1 of the Agreement provides that the Purchaser agrees to purchase 11,363,636 shares of common stock of the Company at a purchase price of US$2.20 per share.

WHEREAS, the Company and the Purchaser desire to amend the Agreement to reduce the purchase price to US$2.027 per share and adjust the number of Purchase Shares accordingly.

WHEREAS, Section 6.8 of the Agreement provides that any provision of the Agreement may be amended, modified or terminated only upon the written consent of the Company and the Purchaser.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Purchaser and the Company hereby agree as follows:

1.     Amendment.  Section 2.1 of the Agreement is hereby amended and restated in its entirety to read as follows:

Purchase and Sale.  At the Closing, the Company hereby agrees to sell to the Purchaser, and the Purchaser hereby agree to purchase, for a purchase price of US$2.027 per share, 11,363,636 shares of Common Stock (the “Purchase Shares”) for an aggregate purchase price of US$$23,033,597.

2.     Continuing Agreement.  Except as specifically amended by this Amendment, all of the terms of the Agreement shall remain and continue in full force and effect.

3.     Counterparts.  This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.  A facsimile, portable document file (PDF) or other reproduction of this Amendment may be executed by one or more parties and delivered by such party by facsimile, electronic mail or any similar electronic transmission pursuant to which the signature of or on behalf of such party can be seen.  Such execution and delivery shall be considered valid, binding and effective for all purposes.

4.     Governing Law.  This Amendment shall be governed by and construed in accordance with the internal and substantive laws of the State of California and without regard to any conflicts of laws concepts which would apply the substantive law of some other jurisdiction.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the Purchaser and the Company have caused their duly authorized representatives to execute this Amendment as of the date first written above.

COMPANY:
UTSTARCOM, INC.
By:	/s/ Peter Blackmore
Name:		Peter Blackmore
Title:		Chief Executive Officer

Signature Page to Fourth Amendment to Common Stock Purchase Agreement

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IN WITNESS WHEREOF, the Purchaser and the Company have caused their duly authorized representatives to execute this Amendment as of the date first written above.

PURCHASER:
BEIJING E-TOWN INTERNATIONAL INVESTMENT AND DEVELOPMENT CO., LTD.
By:	/s/ Xiaoping Li
Name:		Xiaoping Li
Title:		Executive Deputy General Manager

Signature Page to Fourth Amendment to Common Stock Purchase Agreement

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EX-10.2

Exhibit 10.2

UTSTARCOM, INC.

FOURTH AMENDMENT TO COMMON STOCK PURCHASE AGREEMENT

This FOURTH AMENDMENT (this “Amendment”) to the Common Stock Purchase Agreement dated as of February 1, 2010, as amended on April 30, 2010, June 4, 2010 and July 7, 2010 (the “Agreement”), by and among UTStarcom, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Company”) and the purchasers listed on Schedule A thereto (the “Purchasers”), is made and entered into as of September 7, 2010.  Capitalized terms used and not otherwise defined in this Amendment shall have the meanings ascribed to them in the Agreement.

RECITALS

WHEREAS, Section 2.1 of the Agreement provides that the Purchasers agree to purchase certain shares of common stock of the Company at a purchase price of US$2.20 per share.

WHEREAS, the Company and the Purchasers desire to amend the Agreement to reduce the purchase price and adjust the number of Purchase Shares accordingly.

WHEREAS, Section 6.8 of the Agreement provides that any provision of the Agreement may be amended, modified or terminated only upon the written consent of the Company and the Purchasers representing 75% of the Purchase Shares.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Purchasers and the Company hereby agree as follows:

1.     Amendments.  (a)  Section 2 of the Agreement is hereby amended and restated in its entirety to read as follows:

“2. Purchase and Sale of the Purchase Shares.

2.1           Purchase and Sale.  The Company hereby agrees to sell to the Purchasers, and the Purchasers hereby agree to purchase, for such purchase price per share as set forth on the Schedule of Purchasers, shares of Common Stock in the amounts listed on the Schedule of Purchasers (the “Purchase Shares”) at one or more closings.

2.2           Closings.  As soon as practicable following satisfaction or waiver (to the extent permitted hereunder) of all the conditions precedent set forth in Section 5.1 and Section 5.2 below (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver (to the extent permitted hereunder) of such conditions), at the first closing (the “Closing”), the Company shall issue and sell the applicable Purchase Shares to the Purchasers as indicated on the Schedule of Purchasers.  The Purchasers may purchase up to an additional 3,972,251 Purchase Shares at a second closing (the “Second Closing) as indicated on the Schedule of Purchasers until November 8, 2010.  The Closing and Second Closing shall take place remotely through the exchange of signature pages and documents electronically or by facsimile.

2.3           Deliveries.  At the Closing or the Second Closing as applicable, each Purchaser shall pay to the Company the purchase price for the Purchase Shares it is purchasing as indicated in the Schedule of Purchasers.  Such payments shall be made by wire transfer of U.S Dollars to a bank account

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of the Company in accordance with the Company’s wire instructions.  The Company shall, at such closing, issue and deliver to each Purchaser a certificate representing the Purchased Shares being purchased by such Purchaser at such closing, as set forth opposite such Purchaser’s name in the Schedule of Purchasers, registered in the name of such Purchaser.”

(b)   Section 5.2 (a) of the Agreement is hereby amended and restated in its entirety to read as follows:

“5.2         Conditions to the Obligation of the Company to Consummate the Closings.  The obligation of the Company to consummate the Closing and the Second Closing and to issue and sell the Purchase Shares to the Purchasers at the Closing and the Second Closing is subject to the satisfaction of the following conditions precedent:

(a)          Representations and Warranties; Covenants.

(1)   Each of the representations and warranties of each Purchaser in Section 4 shall be true and correct as of the date of this Agreement and as of the date of the Closing and/or the Second Closing as applicable as though made at that time.

(2)   Each of the Purchasers shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement prior to the date of Closing and/or the Second Closing as applicable.”

(c)   Schedule A of the Agreement is hereby amended and restated in its entirety to read as follows:

“SCHEDULE OF PURCHASERS

Closing:

Name and Address	Price Per Share (US$)	Investment Amount (US$)	Number of Purchase Shares
Elite Noble Limited Address: Room 512, 5/F., Tower 1 Silvercord, 30 Canton Road Tsimshatsui, Kowloon Hong Kong Facsimile: +852 2114 0183 Attn: Jingchun Sun	2.027	2,600,000	1,282,711
Shah Capital Opportunity Fund LP Address: 8601 Six Forks Road, Suite 630 Raleigh, NC  27615 USA Facsimile: +1 (919) 719-6370 Attn: Himanshu H. Shah	2.027	11,000,000	5,426,855

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Second Closing:

Elite Noble Limited may, at the Second Closing, purchase up to 3,972,251 additional Purchase Shares at a purchase price per share of US$2.027 if the Second Closing takes place on or prior to October 7, 2010 and US$2.047 if the Second Closing takes place between October 8, 2010 and November 8, 2010.”

2.     Continuing Agreement.  Except as specifically amended by this Amendment, all of the terms of the Agreement shall remain and continue in full force and effect.

3.     Counterparts.  This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.  A facsimile, portable document file (PDF) or other reproduction of this Amendment may be executed by one or more parties and delivered by such party by facsimile, electronic mail or any similar electronic transmission pursuant to which the signature of or on behalf of such party can be seen.  Such execution and delivery shall be considered valid, binding and effective for all purposes.

4.     Governing Law.  This Amendment shall be governed by and construed in accordance with the internal and substantive laws of the State of California and without regard to any conflicts of laws concepts which would apply the substantive law of some other jurisdiction.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the Purchasers and the Company have caused their duly authorized representatives to execute this Amendment as of the date first written above.

COMPANY:
UTSTARCOM, INC.
By:	/s/ Peter Blackmore
Name:		Peter Blackmore
Title:		Chief Executive Officer

Signature Page to Fourth Amendment to Common Stock Purchase Agreement

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IN WITNESS WHEREOF, the Purchasers and the Company have caused their duly authorized representatives to execute this Amendment as of the date first written above.

PURCHASERS:
ELITE NOBLE LIMITED
By:	/s/ Jingchun Sun
Name:		Jingchun Sun
Title:		Director

Signature Page to Fourth Amendment to Common Stock Purchase Agreement

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IN WITNESS WHEREOF, the Purchasers and the Company have caused their duly authorized representatives to execute this Amendment as of the date first written above.

PURCHASERS:
SHAH CAPITAL OPPORTUNITY FUND LP
By:	/s/ Himanshu H. Shah
Name:		Himanshu H. Shah
Title:		General Partner

Signature Page to Fourth Amendment to Common Stock Purchase Agreement

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EX-99.1

Exhibit 99.1

UTStarcom Closes Strategic Investment by Beijing E-town International Investment and

Development Co., Ltd and Other Investors

Jack Lu to Become CEO

Addition of Four New Board Members and Expansion of Board to Seven Members

ALAMEDA, Calif., September 7, 2010 / PRNewswire via COMTEX News Network/ — UTStarcom, Inc. (Nasdaq: UTSI) today announced that it has successfully closed the strategic investment transaction led by Beijing E-town International Investment and Development Co., Ltd.(“BEIID”), an investment company established by the Beijing Municipality, following revisions in terms from those announced on February 1, 2010. Under the revised terms, UTStarcom received a total investment of $36.6 million and issued approximately 18.1 million shares of common stock, equating to a per share purchase price of approximately $2.03.  BEIID (through E-town International Holding (Hong Kong) Co., Limited) invested approximately $23.0 million and Shah Capital Management (through Shah Capital Opportunity Fund LP) invested $11.0 million.  Ram Max Group Limited (through Elite Noble Limited) invested $2.6 million and received an option to purchase up to an additional approximately 4.0 million shares within the next two months. The purchase price for such shares would also be approximately $2.03 per share, subject to increase depending on the timing of the purchase. If the option were to be exercised in full, the total number of shares purchased by Ram Max Group would be approximately 5.3 million.

In connection with the closing of the transaction, Jack Lu, the Company’s former COO, has been appointed CEO and replaced Mr. Peter Blackmore on the Company’s Board of Directors. In addition, three new members joined the Company’s Board of Directors effective at closing. A new seat was created for Mr. Baichuan Du, a former Deputy Chief Engineer of China’s State Administration of Radio, Film and Television, increasing the total number of directors on the board from six to seven.  Mr. Xiaoping Li, Executive Deputy General Manager of BEIID and Mr. William Wong, a Managing Director at Yellowstone Capital, replaced Mr. Allen Lenzmeier and Mr. Jeff Clarke, who resigned from their board positions.

“We are pleased to execute this transaction as it provides an important foundation for strengthening UTStarcom’s relationships and presence in China,” commented Thomas Toy,

UTStarcom’s Chairman of the Board of Directors. “I am confident in Jack Lu’s ability to take over the CEO role as he has been managing most of the Company’s operations for the last six months. With the appointment of three capable strategic additions to the Board, UTStarcom has a solid leadership team in place to drive the future strategic direction of the Company in exciting ways. We thank Peter Blackmore for his past leadership, which has been instrumental in our Company’s transition.  We also thank Allen Lenzmeier and Jeff Clark for their past guidance and contributions as members of the Company’s Board of Directors.”

Jack Lu, UTStarcom’s new CEO added, “I am encouraged by the progress we have made to simplify the Company and improve our business. The new management team is focused on ramping bookings for IPTV and optical Broadband technologies in our target markets, particularly in China where the Company is well positioned to become a top supplier in China’s Triple Network Convergence, not only for equipment and system solutions but also for operations support services.”

UTStarcom’s operational headquarters have been moved to Beijing, China. The Company will continue to be domiciled in the U.S. and registered with the U.S. Securities and Exchange Commission (“SEC”) and be subject to the same SEC reporting requirements. The company’s shares will continue to trade on the NASDAQ stock market under the ticker symbol “UTSI.”

BofA Merrill Lynch acted as financial advisor to UTStarcom. Wilson Sonsini Goodrich & Rosati, Professional Corporation served as outside counsel to UTStarcom. Yellowstone Capital advised and coordinated among BEIID, Shah Capital and Ram Max in connection with the transaction.

About UTStarcom, Inc.

UTStarcom is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks.

Founded in 1991 and with its operational headquarters in Beijing, China, the Company has research and development operations in the United States, China, and India. For more information about UTStarcom, visit the Company’s Web site at http://www.utstar.com.

Forward-Looking Statements

This release includes forward-looking statements, including statements regarding the Company’s strategy to reduce operating expenses, achieve profitability, invest in selective products and certain geographic regions, transition to a new business model and management and its positioning for success in China’s Triple Network Convergence.  These statements are forward-looking in nature and subject to risks and uncertainties that may cause actual results to differ materially. These risks include the ability of the Company to realize anticipated results of operational improvements, increase bookings, successfully transition to a new management team and headquarters location, execute on its business plan and manage regulatory matters as well as risk factors identified in its latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as filed with the Securities and Exchange Commission. The Company is in a period of significant transition and in the conduct of its business is exposed to additional risks as a result. All forward-looking statements included in this release are based upon information available to the Company as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statement.

For more information, please contact:

Market Street Partners

Linda Rothemund

415-445-3236